Fiscal Policy in the Overlapping-Generations ModelOverlapping-generations model

Maksym Ivanyna, Alex Mourmouras and Peter Rangazas
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Maksym Ivanyna: Joint Vienna Institute
Alex Mourmouras: IMF

Chapter Chapter 5 in The Macroeconomics of Corruption, 2021, pp 151-184 from Springer

Abstract: Abstract In this chapter we introduce several different features of fiscal policy into the overlapping-generations model, including taxes and transfers, government purchases of both consumption services and public capital, and government borrowing. A major objective in this chapter is to examine how fiscal policy affects private capital formation and economic growth. As suggested in Chap. 4 , introducing public capital investment, first encountered in Chap. 2 , is essential to build a more complete and accurate explanation of modern growth. The chapter also includes a discussion of the causes and the consequences of the fiscal crisis facing developed countries around the world. As discussed in Chaps. 2 and 3 , both economic fundamentals and politics have contributed to the emergence of the fiscal crisis. The fiscal policy additions to the growth model of Chap. 4 provide the needed theoretical foundation to understand the Big Three economic problems of the 21st century that were introduced in Chap. 1 and that will be analyzed further in Chap. 8 .

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-030-67557-8_5

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DOI: 10.1007/978-3-030-67557-8_5

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