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Government Debt and Capital Accumulation in the Blanchard-Cass-Yaari OLG Model

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  • Bo Sandemann Rasmussen

    (Department of Economics, University of Aarhus, Denmark)

Abstract

It is shown that although government debt in principle has an ambiguous effect on the steady state capital stock in an OLG model of the Blanchard-Cass-Yaari variety, once stability of the steady state equilibrium is imposed there is an unambiguous negative relation between the level of government debt and the capital stock.

Suggested Citation

  • Bo Sandemann Rasmussen, "undated". "Government Debt and Capital Accumulation in the Blanchard-Cass-Yaari OLG Model," Economics Working Papers 2000-14, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2000-14
    as

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    File URL: https://repec.econ.au.dk/repec/afn/wp/00/wp00_14.pdf
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    References listed on IDEAS

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    2. Gertler, Mark, 1999. "Government debt and social security in a life-cycle economy," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 61-110, June.
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    7. Ebbe Yndgaard, "undated". "Labour, An Equivocal Concept for Economic Analyses," Economics Working Papers 2000-5, Department of Economics and Business Economics, Aarhus University.
    8. Effrosyni Diamantoudi & Licun Xue, 2003. "Farsighted stability in hedonic games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(1), pages 39-61, August.
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    11. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
    12. Licun Xue, "undated". "A Notion of Consistent Rationalizability - Between Weak and Pearce's Extensive Form Rationalizability," Economics Working Papers 2000-4, Department of Economics and Business Economics, Aarhus University.
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    Cited by:

    1. Boriss Siliverstovs, 2005. "The Bi-parameter Smooth Transition Autoregressive model," Economics Bulletin, AccessEcon, vol. 3(23), pages 1-11.
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    3. Nikolaj Malchow-Moeller & Bo Jellesmark Thorsen, "undated". "Investment under Uncertainty - the Case of Repeated Investment Options," Economics Working Papers 2000-15, Department of Economics and Business Economics, Aarhus University.

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    More about this item

    Keywords

    OLG model; government debt; stability; capital accumulation;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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