Growth-Maximizing Public Debt under Changing Demographics
| Autor: | Nikola Bokan, Svend E. Hougaard Jensen, Andrew Hughes Hallett |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2016 |
| Předmět: |
Macroeconomics
Economics and Econometrics Balanced budget Public debt Demographic changes media_common.quotation_subject 05 social sciences Context (language use) Public capital Fiscal rules Debt 0502 economics and business Economics Marginal product Revenue Internal debt 050207 economics Welfare 050205 econometrics media_common |
| Zdroj: | Macroeconomic Dynamics. 20(6):1640-1651 |
| ISSN: | 1469-8056 1365-1005 |
| Popis: | This paper develops an overlapping-generations model to study the growth-maximizing level of public debt under conditions of demograhic change. It is shown that the optimal debt level depends on a positive marginal productivity of public capital. In general, it also depends on the demographic parameters, but not if the government is not allowed to borrow to cover revenue shortfalls for current age-related spending. In that context, balanced budget rules are not an approriate form of fiscal rule. The implication is that a government facing demograhic change or demands for more welfare spending will have to adjust its fiscal plans to accommodate those changes, most likely downward, if growth is to be preserved. An advantage of this model is that it allows us to determine in advance the way in which fiscal policies need to adjust as demographic parameters change. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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