Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/92615 
Year of Publication: 
2010
Series/Report no.: 
ISER Discussion Paper No. 791
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
In a Diamond-type overlapping-generations setting public debt issuance places no burden on future generations including those who repay the debt if prices and wages are fixed and unemployment occurs in the periods in which public bonds are issued and repaid. Whether the collected fund is spent on government purchases or transfers to the present generation, public bond issuance stimulates aggregate demand and creates additional employment of future generations, which yields additional income that is large enough to cover their tax burden. This property is true whether the debt is repaid by children or grandchildren.
Subjects: 
demand shortage
overlapping generations
public debt
unemployment
welfare effects
JEL: 
E24
E62
H63
Document Type: 
Working Paper

Files in This Item:
File
Size
148.02 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.