Saving and Endogenous Growth: A Survey of Theory and Policy

Willem Buiter

No 606, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The paper surveys and extends recent results on the effect of changes in government fiscal and financial policy, and in private savings behaviour, on economic growth. Private saving behaviour is represented by an overlapping generations (OLG) model. The supply side of the model permits endogenous growth through aggregate constant returns to an augmentable input. Private sector behaviour is parameterized with the time preference rate, the intertemporal elasticity of substitution, the birth rate, the death rate and the rate at which labour productivity declines with age. Fiscal instruments include public consumption spending, the capital income tax rate, deficit financing and balanced-budget intergenerational redistribution (an unfunded social security retirement scheme).

Keywords: Endogenous Growth; Public Debt; Savings Behaviour; Social Security; Taxation (search for similar items in EconPapers)
JEL-codes: E21 E62 H62 O41 (search for similar items in EconPapers)
Date: 1991-12
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Citations: View citations in EconPapers (9)

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