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Title:Public debt and full employment in a stockflow consistent model of a corporate economy PDF Logo
Authors:Ryoo, Soon
Skott, Peter
Issue Date:2011
Series/Report no.:Working Paper, University of Massachusetts, Department of Economics 2011-26
Abstract:This paper examines the fiscal requirements for continuous full employment. We find that (i) changes in the financial behavior of households and firms require adjustments in tax rates and public debt, (ii) the stability of the steady-state solution for public debt depends on the fiscal instrument and the household consumption function, (iii) in stable cases, a fall in government consumption (or a decline in another component of autonomous demand) requires an increase in the steady-state ratio of public debt to capital, and (iv) the steady-state tax rate may be positively or negatively related to the level of debt.
Subjects:public debt
stock-flow consistency
corporate economy
full employment
JEL:E62
E22
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, University of Massachusetts

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