The paper investigates how changes in fiscal policy can affect relative prices, composition of private consumption, growth and welfare in a two-country, overlapping generations model of endogenous growth. We develop a simple framework that combines Blanchard-type consumers with uncertain...

With this paper our objective is to study the effects of different deficit policies in an endogenous growth model with publicly funded human capital accumulation and public debt, where we allow for heterogeneous households. Two types of households are considered. One household acquires human...