The Solow Model
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In this chapter we will analyse the dynamics of budget deficits, public debt and economic growth in a model with an AK production. This is a particularly simple way to capture the basic ideas of endogenous growth models, as they are developed in Romer (1986, 1987, 1990) and Lucas (1988). See Barro and Sala-i Martin (1995) and Aghion and Howitt (1998) for detailed expositions of different endogenous growth models.
KeywordsOutput Growth Public Debt Budget Deficit Capital Growth Capital Ratio
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