Public Debt and Public Investment in an Endogenous Growth Model with Real Wage Rigidities
17 Pages Posted: 22 Dec 2009
There are 2 versions of this paper
Public Debt and Public Investment in an Endogenous Growth Model with Real Wage Rigidities
Date Written: 2009-02-14
Abstract
We present an endogenous growth model with public capital, public debt and real wage rigidities due to labor market imperfections. Assuming that the primary surplus relative to gross domestic produce (GDP) is a positive function of the debt to GDP ratio, we study growth and employment effects of deficit-financed public investment using simulations as well as how fiscal policy affects stability of the economy. Further, we contrast the growth rate and the unemployment rate in the deficit scenario with that of the balanced budget scenario. Finally, we compare our results with those obtained in case of flexible wages and full employment.
Suggested Citation: Suggested Citation
Here is the Coronavirus
related research on SSRN
Recommended Papers
-
Public Debt and Public Investment in an Endogenous Growth Model with Real Wage Rigidities
By Alfred Greiner and Peter Flaschel
-
National Minimum Wages, Capital Mobility and Global Economic Growth
By Andreas Irmen and Berthold U. Wigger
-
Dual Labor Markets and the Impact of Minimum Wages on Atypical Employment
By Peter Flaschel and Alfred Greiner
Public Debt and Public Investment in an Endogenous Growth Model with Real Wage Rigidities
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $42.00 .
File name: sjpe.pdf
Size: 145K
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
