Under the golden rule of public finance for public investment with a constant budget deficit/GDP ratio, we show that for the sustainability of government budget deficits there is a threshold of the initial public debt for a given stock of public capital, and that this threshold level of public...

Investigating the effects of population aging on fertility and economic growth, we show that an increase in life expectancy lowers the fertility rate and raises life-cycle savings, and that a pay-as-you-go social security does not reverse the effect on fertility.

We examine the effect of source-based capital taxation on capital accumulation in countries with endogenous fertility and free international capital mobility. When fertility is constant, a tax cut accelerates domestic capital accumulation through international arbitrage and exerts negative...

With a longer life expectancy, individuals who plan to work when they are old may increase the number of their children. Therefore, when individuals choose the time of retirement, the fertility rate may not necessarily decline but even rise.

Incorporating heterogeneity in preference to having children into an overlapping generations model of a small open economy, we examine the effects of changes in the size of payasyougo (PAYG) social security on fertility choices of individuals and population growth of the economy. It is shown...

Incorporating consumption–savings choices under a general concave utility function and hence an endogenous capital supply into a model of capital tax competition, we re-investigate Nash equilibrium and compare it with the optimum under cooperative tax policy. In contrast to the case of fixed...

We analyze the link between the sustainability of bond-financed deficit policy and involuntary unemployment in an overlapping generations model incorporating the fair wage hypothesis. If the fiscal deficit policy is sustainable, reductions in bond-financed deficit increase per worker capital...

This paper examines the effects of government educational subsidies on economic growth and welfare. In an overlapping-generations model with human-capital accumulation, it is shown that, even when human-capital externalities are large, an increase in government subsidies to private-education...