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Title:Dynamic Fiscal Policies, Unemployment, and Economic Growth PDF Logo
Authors:Josten, Stefan Dietrich
Issue Date: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:urn:nbn:de:gbv:705-opus-1370
Document Type:Working Paper
Appears in Collections:Diskussionspapiere, Fächergruppe VWL, Helmut-Schmidt-Universität

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