Functional finance and intergenerational distribution in neoclassical and Keynesian OLG models

Peter Skott and Soon Ryoo

Review of Keynesian Economics, 2017, vol. 5, issue 1, 112-134

Abstract: This paper examines the role of fiscal policy in a Keynesian OLG model. We show that (i) dynamic inefficiency in a neoclassical OLG model generates aggregate demand problems in a Keynesian version of the model, (ii) fiscal policy can be used to achieve full-employment growth, (iii) the required debt ratio is inversely related to both the growth rate and government consumption, and (iv) a simple and distributionally neutral tax scheme can maintain full employment in the face of variations in 'household confidence.'

Keywords: public debt; Keynesian OLG model; secular stagnation; structural liquidity trap; dynamic efficiency; confidence (search for similar items in EconPapers)
JEL-codes: E22 E62 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.elgaronline.com/view/journals/roke/5-1/roke.2017.01.09.xml (application/pdf)
Restricted access

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:elg:rokejn:v:5:y:2017:i:1:p112-134

Access Statistics for this article

Review of Keynesian Economics is currently edited by Thomas Palley, Matías Vernengo and Esteban Pérez Caldentey

More articles in Review of Keynesian Economics from Edward Elgar Publishing
Bibliographic data for series maintained by Phillip Thompson ().