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Endogenous growth, government debt and budgetary regimes: A Corrigendum

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  • Minea, Alexandru
  • Villieu, Patrick

Abstract

We 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.

Suggested Citation

  • Minea, Alexandru & Villieu, Patrick, 2010. "Endogenous growth, government debt and budgetary regimes: A Corrigendum," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 709-711, June.
  • Handle: RePEc:eee:jmacro:v:32:y:2010:i:2:p:709-711
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    Cited by:

    1. 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.
    2. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2015. "Deficit Rules and Monetization in a Growth Model with Multiplicity and Indeterminacy," Working Papers halshs-01199774, HAL.
    3. Maxime MENUET & Alexandru MINEA & Patrick VILLIEU, 2017. "Public Debt, Endogenous Growth Cycles and Indeterminacy," LEO Working Papers / DR LEO 2467, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    4. repec:spr:joecth:v:65:y:2018:i:4:d:10.1007_s00199-017-1040-5 is not listed on IDEAS
    5. Ehrhart, Hélène & Minea, Alexandru & Villieu, Patrick, 2014. "Debt, seigniorage, and the Growth Laffer Curve in developing countries," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 199-210.
    6. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2018. "Deficit, monetization, and economic growth: a case for multiplicity and indeterminacy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 819-853, June.
    7. repec:eee:jmacro:v:55:y:2018:i:c:p:1-11 is not listed on IDEAS

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