In a recent paper, Minea and Villieu (2009) assert that the 'golden rule of public finance' implies a lower growth rate than the balanced-budget rule. Their contribution is misleading because it is not the 'golden rule of public finance' that generates their result but rather the fact that...

This paper studies the relationship between public debt and economic growth for selected emerging markets performing panel data estimations. Several regressor variables are included, but the main focus is on public debt. The results reveal a significant positive correlation between public debt...

In this paper we analyze an endogeneous growth model with human capital that results from public educational spending. We allow for public debt and analyze three different debt policies: a balanced government budget, a slight deficit policy where debt grows but less than GDP, and a strong...

In this paper we analyze effects of public debt on the long-run allocation of resources in a basic endogenous growth model with infinitely lived households. The government levies an income tax and issues government bonds to finance unproductive public spending. We demonstrate that in the case of...

In this article we present an endogenous growth model with productive public investment in infrastructure capital. Further, we suppose that the government pays lump-sum transfers to the household and subsidizes private investment. First, we demonstrate that there exists a unique balanced growth...

This paper presents a model of economic growth with unemployment due to labor market rigidities. The economy consists of a firm that maximizes profits, of a government and of two types of households that maximize inter-temporal utility. One household supplies skilled labor at the first labor...

In this paper we empirically study the relation between public debt and economic growth. We analyze how the public debt to GDP ratio at a certain point in time is correlated with the GDP growth rate in the following period, where we consider a one-year time span, a three-years time interval and...

We present an endogenous growth model with externalities of capital and elastic labour supply where we allow for public debt and public spending that is welfare enhancing. We analyze effects of different debt policies on stability and how these policies affect long-run growth and welfare. The...