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Non-neutrality of Debt with Endogenous Fertility


  • Wildasin, David E


This paper examines the impact of government borrowing on the real equilibrium of an economy with intergenerational or dynastic utility miximizers and endogenous fertility. In general, incremental government borrowing reduces fertility. In addition, borrowing may increase per head consumption and lower the aggregate capital stock. At the same time, it may raise the capital/labor ratio and the wage/rental ratio, lower utility per head for the current generation, and raise utility per head of future generations. Identical results obtain for unfunded social security programs. Copyright 1990 by Royal Economic Society.

Suggested Citation

  • Wildasin, David E, 1990. "Non-neutrality of Debt with Endogenous Fertility," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 414-428, April.
  • Handle: RePEc:oup:oxecpp:v:42:y:1990:i:2:p:414-28

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    References listed on IDEAS

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    Cited by:

    1. Zhang, Jie, 2003. "Optimal debt, endogenous fertility, and human capital externalities in a model with altruistic bequests," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1825-1835, August.
    2. Ehrlich, Isaac & Lui, Francis, 1997. "The problem of population and growth: A review of the literature from Malthus to contemporary models of endogenous population and endogenous growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 205-242, January.
    3. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
    4. Kolmar, Martin, 1997. "Optimal intergenerational redistribution and strategic incentives with two countries and endogenous fertility: Theory and application to the European Union," Discussion Papers, Series II 340, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    5. Fanti, Luciano & Spataro, Luca, 2013. "On the relationship between fertility and public national debt," Economic Modelling, Elsevier, vol. 33(C), pages 843-849.
    6. Mohamed Jellal & Francois-Charles Wolff, 2002. "Insecure old-age security," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 636-648, October.
    7. Zhang, Jie, 1995. "Social security and endogenous growth," Journal of Public Economics, Elsevier, vol. 58(2), pages 185-213, October.
    8. Wellisch, Dietmar & Richter, Wolfram F., 1995. "Internalizing intergenerational externalities by regionalization," Regional Science and Urban Economics, Elsevier, vol. 25(6), pages 685-704, December.
    9. Kai(Jackie) Zhao, 2009. "War Debt and the Baby Boom," 2009 Meeting Papers 856, Society for Economic Dynamics.
    10. B. Douglas Bernheim, 1987. "Ricardian Equivalence: An Evaluation of Theory and Evidence," NBER Chapters,in: NBER Macroeconomics Annual 1987, Volume 2, pages 263-316 National Bureau of Economic Research, Inc.
    11. Kolmar, Martin, 2001. "Optimal Intergenerational Redistribution in a Two-Country Model with Endogenous Fertility," Public Choice, Springer, vol. 106(1-2), pages 23-51, January.
    12. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, vol. 40(8), pages 1561-1589, November.
    13. Zhang, Junxi, 1995. "Does unfunded social security also depress output growth?," Economics Letters, Elsevier, vol. 49(3), pages 307-312, September.
    14. Koichi Miyazaki, 2013. "Pay-as-you-go social security and endogenous fertility in a neoclassical growth model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1233-1250, July.
    15. David Wildasin, 2008. "Public Finance in an Era of Global Demographic Change: Fertility Busts, Migration Booms, and Public Policy," Working Papers 2008-02, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    16. Zhang, Jie, 2006. "Second-best public debt with human capital externalities," Journal of Economic Dynamics and Control, Elsevier, vol. 30(2), pages 347-360, February.
    17. Kolmar, Martin, 1999. "Optimale Ansiedlung sozialpolitischer Entscheidungskompetenzen in der Europäischen Union," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 7, number urn:isbn:9783161471254.

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