The Burden of Public Debt in Neoclassical Growth Models: Do We Have to Worry About it?

Dedák, István; Dombi, Ákos

doi:10.2139/ssrn.2842582

SSRN Journal

2016

DOI: 10.2139/ssrn.2842582

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The Burden of Public Debt in Neoclassical Growth Models: Do We Have to Worry About it?

István Dedák

Ákos Dombi²

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Cited by 2 publications

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“…The burden of public debt related to distortionary taxes is beyond the scope of this paper. However, its magnitude is negligible (Dedák and Dombi, ).…”

mentioning

confidence: 99%

See 1 more Smart Citation

A Closed‐form Solution for Determining the Burden of Public Debt in Neoclassical Growth Models

Dedák

Dombi

2017

Bulletin of Econ Res

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This paper develops a new approach, termed as the stock approach, to calculate the steady-state output loss caused by public debt in neoclassical growth models. The novelty of our stock approach is that it provides a closed-form solution to the steady-state output-debt relationship. The main conclusion of the paper is that the steady-state burden of public debt is country-specific in neoclassical growth models and it decreases with the private saving rate and increases with the population growth rate, with the exception of the special case where Ricardian equivalence holds.

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“…The burden of public debt related to distortionary taxes is beyond the scope of this paper. However, its magnitude is negligible (Dedák and Dombi, ).…”

mentioning

confidence: 99%

“…Note, that a p close to zero corresponds to the basic Blanchard model in which public debt has only marginal negative effect on long‐run output (e.g., Evans ; Dedak and Dombi ).…”

mentioning

confidence: 99%

A Closed‐form Solution for Determining the Burden of Public Debt in Neoclassical Growth Models

Dedák

Dombi

2017

Bulletin of Econ Res

View full text Add to dashboard Cite

show abstract

A Closed-Form Solution for Determining the Burden of Public Debt in Neoclassical Growth Models

Dedák

Dombi

2016

SSRN Journal

View full text Add to dashboard Cite

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The Burden of Public Debt in Neoclassical Growth Models: Do We Have to Worry About it?

Cited by 2 publications

References 49 publications

A Closed‐form Solution for Determining the Burden of Public Debt in Neoclassical Growth Models

A Closed‐form Solution for Determining the Burden of Public Debt in Neoclassical Growth Models

A Closed-Form Solution for Determining the Burden of Public Debt in Neoclassical Growth Models

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