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
Date Written: October 20, 2000
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: Suggested Citation