Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/23527
Authors: 
Josten, Stefan Dietrich
Year of Publication: 
2003
Series/Report no.: 
Diskussionspapier / Helmut-Schmidt-Universität Hamburg, Fächergruppe Volkswirtschaftslehre 9
Abstract: 
This paper analyzes the growth and employment effects of dynamic fiscal policies in an overlapping generations model with endogenous growth and imperfect labour markets. With balanced-budget policies, the modelled closed economy grows at a constant rate which is the higher, the lower are the labour tax rate and the unemployment rate. Both government Ponzi games and constant-flow budget policies are shown not to be feasible. Furthermore, while constant-stock fiscal policies are sustainable, an increase in the debt-to-capital ratio is accompanied by higher taxes, a rise in unemployment and lower economic growth.
Subjects: 
Unemployment
Public debt
Economic growth
Overlapping generations
JEL: 
J51
E24
H63
O41
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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