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Equivalence in the internal and external public debt burden


  • Philippe Darreau

    () (University of Limoges)

  • François Pigalle

    () (University of Limoges)


Whether public debt is internal or external, the burden is equivalent in the OLG model. This equivalence holds, regardless of whether the definition of burden reflects Modigliani's view or Lerner's perspective. It results from the assumption of perfect substitutability between public debt and productive capital.

Suggested Citation

  • Philippe Darreau & François Pigalle, 2013. "Equivalence in the internal and external public debt burden," Economics Bulletin, AccessEcon, vol. 33(4), pages 2475-2482.
  • Handle: RePEc:ebl:ecbull:eb-13-00448

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    References listed on IDEAS

    1. Buiter, Willem H, 1981. "Time Preference and International Lending and Borrowing in an Overlapping-Generations Model," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 769-797, August.
    2. Mutoh, Takahiko, 1985. "The equivalence of the burden of internal and external public debt," Economics Letters, Elsevier, vol. 17(4), pages 369-372.
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    Cited by:

    1. KPEMOUA, Palakiyèm, 2016. "La Dette Exterieure Handicape T’Elle La Croissance Economique Du Togo ?
      [Is External Debt A Brake On Togo’S Economic Growth?]
      ," MPRA Paper 77403, University Library of Munich, Germany, revised 09 Jan 2017.

    More about this item


    Public debt; open economy; crowding out; OLG model; burden;

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook


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