National Debt, Borrowing Constraints, and Human Capital Accumulation in an Endogenous Growth Model
AbstractThis paper presents an overlapping-generations endogenous growth model of human capital accumulation with borrowing constrained young individuals. On a small open economy's equilibrium growth path, production, human capital, and physical capital all grow at a uniform rate that depends, apart from a vector of parameters, only on the amount of time that decentrally optimizing, borrowing constrained private households allocate to education and training. An increase in public debt that is used to redistribute tax burdens from every individual's youth to his middle age raises the equilibrium growth rate of the economy and improves the intertemporal allocation of resources.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 58 (2001)
Issue (Month): 3 (July)
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Find related papers by JEL classification:
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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- Zhang, Jie, 1995. "Social security and endogenous growth," Journal of Public Economics, Elsevier, vol. 58(2), pages 185-213, October.
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