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Sustainability and Optimality of Public Debt

Sustainability and Optimality of Public Debt

Paperback

Series: Contributions to Statistics

Economics

Currently unavailable to order

ISBN10: 3790808342
ISBN13: 9783790808346
Publisher: Springer Nature
Published: Feb 24 1995
Pages: 217
Language: English
The focus of this book is on the dynamics of public dept. It proves useful to consider the Solow growth model, the overlapping generations model and the infinite horizon model. Sustainability refers to the existence and the stability of the long-run equilibrium. The government can follow either of two strategies: it fixes the deficit ratio or the tax rate. By means of phase diagrams, we trace out the processes of adjustment induced by various macroeconomic shocks. In addition, different scenarios are reviewed: closed economy, the open economy, and two countries. The open economy adds the dynamics of the current account and of foreign dept.

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