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Title:Public debt in an OLG model with imperfect competition PDF Logo
Authors:Skott, Peter
Ryoo, Soon
Issue Date:2011
Series/Report no.:Working Paper, University of Massachusetts, Department of Economics 2011-25
Abstract:Fiscal policy is needed to avoid dynamic inefficiency and maintain full employment in a modified Diamond OLG model with imperfect competition. A distributionally neutral tax scheme can maintain full employment in the face of variations in household confidence. No variations in taxes will be needed if households correctly anticipate future taxes: the tax policy functions as an insurance scheme.
Subjects:public debt
Keynesian OLG model
dynamic efficiency
confidence
JEL:E62
E22
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, University of Massachusetts

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