Government Debt and Capital Accumulation in the Blanchard-Cass-Yaari OLG Model

University of Aarhus Economics Working Paper 2000-14

10 Pages Posted: 12 Mar 2001

See all articles by Bo Sandemann Rasmussen

Bo Sandemann Rasmussen

Aarhus University - Department of Economics and Business Economics

Date Written: October 20, 2000

Abstract

It is shown that although government debt in principle has an ambiguous effect on the steady state capital stock in an OLG model of the Blanchard-Cass-Yaari variety, once stability of the steady state equilibrium is imposed there is an unambiguous negative relation between the level of government debt and the capital stock.

JEL Classification: E13, H63

Suggested Citation

Rasmussen, Bo Sandemann, Government Debt and Capital Accumulation in the Blanchard-Cass-Yaari OLG Model (October 20, 2000). University of Aarhus Economics Working Paper 2000-14, Available at SSRN: https://ssrn.com/abstract=255590 or http://dx.doi.org/10.2139/ssrn.255590

Bo Sandemann Rasmussen (Contact Author)

Aarhus University - Department of Economics and Business Economics ( email )

Fuglesangs Allé 4
Aarhus V
Denmark
+45 8942 1133 (Phone)
+45 8613 6334 (Fax)

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