In this paper we analyze a descriptive endogenous growth model with public debt. The government can run into debt, but, the primary surplus is a positive function of the debt to GDP ratio such that the debt ratio becomes a mean-reverting process. We show that a balanced budget scenario yields a...

We analyze how different budgetary rules affect the stability of an economy in a basic endogenous growth model with public debt and a state-dependent consumption tax rate. We show that a discretionary policy implies that the government violates its inter-temporal budget constraint along a...

In this paper we study the basic endogenous growth model with externalities of capital and elastic labour supply and analyze how budget rules affect stability of the economy. The government levies an income tax with a constant rate and finances public expenditures which are neither productive...

The paper extends the two-class Pasinetti model with workers and capitalists to allow for endogenous growth. Sustained per-capita growth results from positive externalities of investment which for its part only occur if workers devote time to education so that an efficient use of new machines is...

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...

We present an endogenous growth model with human capital and learning by doing. Human capital is not an input factor in the production process of final output but it affects the ability to build up knowledge capital as a by-product of cumulated investment (learning by doing). Human capital is...

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...

In this note we work out the mechanism that makes public debt affect the allocation of resources in the long-run. To do so we analyze an AK growth model with elastic labour supply and a government sector. The government levies a distortionary income tax and issues bonds to finance both lump-sum...

This paper combines horizontal and vertical innovations to build an endogenous growth model that allows for structural change. Older technologies are continuously replaced by newer ones due to creative destruction and new technologies appear as a result of horizontal innovations and as a result...

In endogenous growth theory models exist which are characterized by local and global indeterminacy. These concepts imply that economies differ with respect to their growth rates on the transition path (local indeterminacy) as well as their long-run growth rates (global indeterminacy). While the...