Endogenous growth, government debt and budgetary regimes: A Corrigendum
AbstractWe correct an error in [Greiner, A., Semmler, W., 2000. Endogenous growth, government debt and budgetary regimes. Journal of Macroeconomics 22, 363-384] concerning the effect of different debt rules on long term economic growth. We focus on Proposition 1 stating that, in some cases, using deficits to finance productive public expenditures, may raise long term economic growth. We propose an analytical proof, showing that the cases in which deficits raise the balanced growth path imply Ponzi games and are, therefore, infeasible. Consequently, using deficits to finance public investment is always detrimental to economic growth in the long-run in their model.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Macroeconomics.
Volume (Year): 32 (2010)
Issue (Month): 2 (June)
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Web page: http://www.elsevier.com/locate/inca/622617
Fiscal deficit Public investment Endogenous growth Fiscal rules;
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- Campeanu Emilia & Gyorgy Attila, 2012. "How Can Romanian Government Boost Economic Growth?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 436-442, December.
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