Nishimura, Kazuo; Nourry, Carine; Seegmuller, Thomas; … - Research Institute for Economics and Business … - 2014
We introduce public debt in a Ramsey model with heterogenous agents and a public spending externality a ecting utility which is nanced by income tax and public debt. We show that public debt considered as a xed portion of GDP can have a stabilizing or destabilizing e ect depending on some...