In this paper we analyze an endogenous growth model in which sustained per capital growth results from investment in public capital and the government is allowed to borrow from the capital market. As to the government behavior, we do not suppose that governments optimize but instead stick to...

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...

This book considers public debt dynamics in various endogenous growth models, namely the AK model and explicit models of innovation and human capital accumulation. Furthermore, the closed economy, the small open economy and a two-country world are analysed. In the closed economy model, the focus...

Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether...

Public debt has become a severe problem for a great many economies. While the effects of tax policies on the allocation of resources are readily derived, the mechanisms that make public deficits and debt influence the economy are not so easily understood. This book elaborates on the effects of...