Showing 1 - 10 of 12
Persistent link: https://www.econbiz.de/10012659450
By an endogenous growth model with two-period overlapping generations structure and money holding of consumers, we examine the existence of budget deficit in an economy which endogenously grows by investments of firms. The main results are as follows. (1) Budget deficit is necessary for full...
Persistent link: https://www.econbiz.de/10014465992
The purpose of this paper is to show, using a simple two-periods overlapping generations (OLG) model in which goods are produced solely by labor in a monopolistically competitive industry, that a continuous budget deficit is necessary to maintain full-employment under economic growth driven by...
Persistent link: https://www.econbiz.de/10013234121
Recently, a school of thought called Modern Monetary Theory (MMT) has been attracting attention, but it has not received much theoretical or mathematical analysis. In this paper, we examine the theoretical validity of the MMT argument using an overlapping generations (OLG) model that includes...
Persistent link: https://www.econbiz.de/10013313872
Using a simple macroeconomic model and a model with microeconomic foundations about behavior of consumers and firms, we examine the budget deficit in a growing economy, and will show mainly the following results. 1) If the initial savings is positive (or investment of private firms is not...
Persistent link: https://www.econbiz.de/10014237798
Using a traditional neoclassical two-period overlapping generations model that takes into account consumers’ money holdings, we examine the existence of budget deficit in an economy which grows at the constant positive rate. The following results will be shown. 1) Budget deficit is necessary...
Persistent link: https://www.econbiz.de/10014077626
The aim of the paper is to show, using a simple two-period overlapping generations model in which goods are produced solely by labour in a monopolistically competitive industry, that a continuous budget deficit (including the interest payments on government bonds) is necessary to achieve and...
Persistent link: https://www.econbiz.de/10014081705
It is said that public finance must be balanced at least in the long run. According to the so-called MMT (Modern Money Theory or Modern Monetary Theory) approach, however, this is not true. It is often pointed out that MMT lacks the mathematical analysis used in ordinary economic discussions....
Persistent link: https://www.econbiz.de/10014081737
Recently, a school of thought called Modern Monetary Theory (MMT) has been attractingattention, but it has not received much theoretical or mathematical analysis. In this paper, weexamine the theoretical validity of the MMT argument using an overlapping generations(OLG) model that includes...
Persistent link: https://www.econbiz.de/10013310427
In his "The World’s smallest macroeconomic model” (Krugman(1999)), Paul Krugman argued that under the assumption of price rigidity, a shortage of money supply leads to underemployment or recession, so increasing money supply can eliminate underemployment and restore full employment. But, how...
Persistent link: https://www.econbiz.de/10014343779