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Endogenous Growth, Government Debt and Budgetary Regimes : A Corrigendum

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  • Alexandru Minea

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • P. Villieu

    (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

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 Proposition1 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

  • Alexandru Minea & P. Villieu, 2010. "Endogenous Growth, Government Debt and Budgetary Regimes : A Corrigendum," Post-Print halshs-00630713, HAL.
  • Handle: RePEc:hal:journl:halshs-00630713 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00630713
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    References listed on IDEAS

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    1. Charles Raux & Jean-Pierre Traisnel & Jean-Pierre Nicolas & Mindjid Maïzia & Karine Delvert, 2005. "Bilans énergétiques Transport-Habitat et méthodologie BETEL. ETHEL. Rapport R2," Post-Print halshs-00101248, HAL.
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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 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. 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.

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