Details

Sustainability and Optimality of Public Debt

Sustainability and Optimality of Public Debt


2nd ed. 2013

von: Michael Carlberg, Arne Hansen

96,29 €

Verlag: Physica-Verlag
Format: PDF
Veröffentl.: 13.12.2012
ISBN/EAN: 9783642329678
Sprache: englisch
Anzahl Seiten: 212

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Beschreibungen

Titelbeschreibung

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.

Inhaltsverzeichnis

<p>Introduction.- A Brief Survey of the Literature.- The Closed Economy: The Solow Model.- Overlapping Generations.- Infinite Horizon.- The Small Open Economy: The Solow Model.- Overlapping Generations.- Two Countries: The Solow Model.- Synopsis.- Conclusion.- Result.</p>

Autorenportrait

<p>Michael Carlberg is Professor at Helmut Schmidt University in Hamburg, Germany. His research is on Macroeconomics, Monetary Economics, and International Economics.</p><p>Arne Hansen is research assistant at Helmut Schmidt University in Hamburg, Germany. His research is on Economic Growth, Public Debt, and International Economics.</p><p>

Back cover copy

<p>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.</p>

Sonderbeitrag

Numerous illustrations and examples help the reader to understand and proceed quickly The investigation covers the closed economy, the small open economy and a two-country setting The analysis includes the Solow model, the overlapping generations model and the infinite horizon model