Public Debt, Budget Deficits, Fertility, and Endogenous Growth
In this paper, we study the effects of budget deficits, public debt, and fertility on economic growth referring to Bräuninger (Public debt and endogenous growth. Physica-Verlag, Heidelberg/New York, 2003; J Public Econ Theory 7:827–840, 2005), Carlberg and Hansen (Sustainability and optimality of public debt, 2nd edn. Physica-Verlag, Berlin/Heidelberg, 2013), and Groezen et al. (J Public Econ 87:233–251, 2003). The analysis is based on an endogenous growth model as developed in Romer (J Polit Econ 94:1002–1035, 1986) and Lucas (J Monet Econ 22:2–42, 1988). For simplicity, we assume an AK production structure that captures the basic idea of these models. The microfoundation of individual consumption-saving decisions is given in an overlapping generations model in the tradition of Diamond (Am Econ Rev 55:1126–1150, 1965).
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