The Neutrality of Optimal Government Financial Policy: Supplying the Intergenerational Free Lunch

Dean Croushore

Eastern Economic Journal, 1987, vol. 13, issue 2, 123-136

Abstract: This paper demonstrates the usefulness and simplicity of the overlapping-generations model for analyzing certain types of macroeconomic problems. An overlapping-generations model is used to clarify and interpret some existing neutrality theorems concerning government debt and monetization. The results demonstrate the stringency of the conditions needed for neutrality, suggesting that money and government debt are very unlikely to be neutral.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:13:y:1987:i:2:p:123-136

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