Public debt in an OLG model with imperfect competition

Peter Skott and Soon Ryoo

UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics

Abstract: Fiscal policy is needed to avoid dynamic inefficiency and maintain full employment in a modified Diamond OLG model with imperfect competition. A distributionally neutral tax scheme can maintain full employment in the face of variations in .household confidence.. No variations in taxes will be needed if households correctly anticipate future taxes: the tax policy functions as an insurance scheme. JEL Categories: E62, E22

Keywords: Public debt; Keynesian OLG model; dynamic effeciency; confidence. (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (2)

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