Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174386
Authors: 
Skott, Peter
Ryoo, Soon
Year of Publication: 
2015
Series/Report no.: 
Working Paper, University of Massachusetts, Department of Economics 2015-13
Abstract: 
This paper examines the role of fiscal policy in the long run. We show that (i) dynamic inefficiency in a standard OLG model generates aggregate demand problems in a Keynesian setting, (ii) fiscal policy can be used to achieve full-employment growth, (iii) the required debt ratio is inversely related to both the growth rate and government consumption, and (iv) a simple and distributionally neutral tax scheme can maintain full employment in the face of variations in 'household confidence'.
Subjects: 
Public debt
Keynesian OLG model
secular stagnation
structural liquidity trap
dynamic efficiency
confidence
JEL: 
E62
E22
Document Type: 
Working Paper

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