Sustainability and Optimality of Public Debt
ISBN:
978-3-642-44630-6
Auflage:
2nd ed. 2013
Verlag:
Springer Berlin
Land des Verlags:
Deutschland
Erscheinungsdatum:
29.01.2015
Format:
Softcover
Seitenanzahl:
212
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This book studies the sustainability and optimality of public debt under different scenarios: the closed economy, the small open economy, and a two-country setting. Sustainability refers to the existence and the stability of the long-run equilibrium. Optimality relates to the path of public debt that maximizes discounted utility. The analysis is conducted within the framework of the Solow model, the overlapping generations model and the infinite horizon model. The government can follow different strategies, it either fixes the deficit ratio or the tax rate. As a result, a fixed deficit ratio generally can be sustained. By contrast, a fixed tax rate generally cannot be sustained. Depending on the chosen fiscal strategy, there exists either an optimal deficit ratio or an optimal tax rate that maximizes the sum of consumption and government purchases per capita.
Schlagwörter
Biografische Anmerkung
Michael Carlberg is Professor at Helmut Schmidt University in Hamburg, Germany. His research is on Macroeconomics, Monetary Economics, and International Economics.Arne Hansen is research assistant at Helmut Schmidt University in Hamburg, Germany. His research is on Economic Growth, Public Debt, and International Economics.
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Erscheinungsjahr:
2024
