Public debt and endogenous growth ; with 10 tables

Public Debt and Endogenous Growth -- Copyright -- Preface -- Contents -- 1 Introduction -- Part I The Closed Economy with AK Production -- 2 The Solow Model -- 3 The Overlapping Generations Model -- Part II Human Capital and Innovations in the Closed Economy -- 4 The Augmented Solow Model -- 5 The Romer Model -- Part III The Open Economy with AK Production -- 6 The Solow Model of the Small Open Economy -- 7 The Solow Model of a Two-Country World -- 8 Conclusion -- 9 Result -- Symbols -- References.

This book considers public debt dynamics in various endogenous growth models, namely the AK model and explicit models of innovation and human capital accumulation. Furthermore, the closed economy, the small open economy and a two-country world are analysed. In the closed economy model, the focus is on budget deficit and public debt dynamics and their influence on capital growth and output growth. Then, in the open economy model, the effects on foreign debt growth are considered. In a two-country setting, public debt growth in one country affects growth in the other country. In each scenario the government either fixes the deficit ratio or the tax rate. For both strategies the steady state is derived and stability is analysed. Then, dynamics induced by various shocks and policy measures are explored. Many diagrams illustrate the dynamics