Government Debt and Capital Accumulation in the Blanchard-Cass-Yaari OLG Model

Bo Sandemann Rasmussen ()
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Bo Sandemann Rasmussen: Department of Economics, University of Aarhus, Denmark, Postal: 8000 Aarhus C, Denmark

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: It is shown that although government debt in principle has an ambiguous effect on the steady state capital stock in an OLG model of the Blanchard-Cass-Yaari variety, once stability of the steady state equilibrium is imposed there is an unambiguous negative relation between the level of government debt and the capital stock.

Keywords: OLG model; government debt; stability; capital accumulation (search for similar items in EconPapers)
JEL-codes: E13 H63 (search for similar items in EconPapers)
Pages: 10
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2000-14

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