Public Debt in a Descriptive Endogenous Growth Model

Alfred Greiner

Annals of Economics and Finance, 2020, vol. 21, issue 1, 173-187

Abstract: In this paper we analyze a descriptive endogenous growth model with public debt. The government runs into debt, but, the primary surplus is a positive function of public debt such that the debt to GDP ratio becomes a mean- reverting process. A balanced budget scenario yields a higher long-run growth rate than a scenario with permanent deficits if and only if the public deficit exceeds the net saving out of government bonds. Further, multiple balanced growth paths can arise and reducing the reaction of the primary surplus to public debt can generate endogenous cycles via a Hopf bifurcation.

Keywords: Public debt; Balanced budget; Endogenous growth; Stability (search for similar items in EconPapers)
JEL-codes: H63 O41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://down.aefweb.net/AefArticles/aef210108Greiner.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2020:v:21:i:1:greiner

Access Statistics for this article

Annals of Economics and Finance is currently edited by Heng-fu Zou

More articles in Annals of Economics and Finance from Society for AEF Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Gao ().