Public debt, productive public spending and endogenous growth

Greiner A (2013) Working Papers in Economics and Management; 23-2013.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

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Abstract / Notes
We analyze effects of public debt in a basic endogenous growth model with productive public spending. We demonstrate that a discretionary policy violates the inter-temporal government budget constraint along a balanced growth path. A balanced government budget gives a unique saddle point stable growth path. With a rule based policy, two saddle point stable balanced growth paths can occur, depending on the inter-temporal elasticity of substitution of consumption and on the primary surplus policy. Higher debt goes along with smaller long-run growth and we derive a condition such that a deficit financed increase in public spending raises the growth rate.
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Greiner A. Public debt, productive public spending and endogenous growth. Working Papers in Economics and Management. Vol 23-2013. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2013.
Greiner, A. (2013). Public debt, productive public spending and endogenous growth (Working Papers in Economics and Management, 23-2013). Bielefeld: Bielefeld University, Department of Business Administration and Economics. doi:10.4119/unibi/2915434
Greiner, A. (2013). Public debt, productive public spending and endogenous growth. Working Papers in Economics and Management, 23-2013, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Greiner, A., 2013. Public debt, productive public spending and endogenous growth, Working Papers in Economics and Management, no.23-2013, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
A. Greiner, Public debt, productive public spending and endogenous growth, Working Papers in Economics and Management, vol. 23-2013, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2013.
Greiner, A.: Public debt, productive public spending and endogenous growth. Working Papers in Economics and Management, 23-2013. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2013).
Greiner, Alfred. Public debt, productive public spending and endogenous growth. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2013. Working Papers in Economics and Management. 23-2013.
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