Sustainable Debt Policy Rules and Growth in a Small Open Economy Model: Is a Balanced Government Budget Worthwhile?

Fabienne Lara Dascher ()
Additional contact information
Fabienne Lara Dascher: Bielefeld University

Comparative Economic Studies, 2020, vol. 62, issue 3, No 3, 373-397

Abstract: Abstract In this paper, our objective is to analyze sustainable debt policy rules and economic growth using a model of endogenous economic growth theory. For the government, it is possible to run into debt, but the primary surplus is a positive linear function of the debt-to-GDP ratio which guarantees that public debt is sustainable. We analyze different sustainable debt policies in this small open economy model of endogenous growth with public capital accumulation, as well we take transitions into account. We investigate the characteristics and stability of the steady state, and we analyze the effects on welfare for the different debt policies.

Keywords: Public debt; Fiscal sustainability; Economic growth; Small open economy model (search for similar items in EconPapers)
JEL-codes: E62 F43 H63 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41294-020-00130-3 Abstract (text/html)
Access to full text is restricted to subscribers.

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:pal:compes:v:62:y:2020:i:3:d:10.1057_s41294-020-00130-3

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-020-00130-3

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().