Endogenous growth, government debt and budgetary regimes: A Corrigendum

Alexandru Minea and Patrick Villieu

Journal of Macroeconomics, 2010, vol. 32, issue 2, 709-711

Abstract: We correct an error in [Greiner, A., Semmler, W., 2000. Endogenous growth, government debt and budgetary regimes. Journal of Macroeconomics 22, 363-384] concerning the effect of different debt rules on long term economic growth. We focus on Proposition 1 stating that, in some cases, using deficits to finance productive public expenditures, may raise long term economic growth. We propose an analytical proof, showing that the cases in which deficits raise the balanced growth path imply Ponzi games and are, therefore, infeasible. Consequently, using deficits to finance public investment is always detrimental to economic growth in the long-run in their model.

Keywords: Fiscal; deficit; Public; investment; Endogenous; growth; Fiscal; rules (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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Working Paper: Endogenous Growth, Government Debt and Budgetary Regimes: A Corrigendum (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:32:y:2010:i:2:p:709-711

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