test_moissonnage_selune
type: Agent

Debt policy rule, productive government spending, and multiple growth paths: a note
type: Dataset
contact point: Organization
  fn: CCSD
keyword: journal-articles
keyword: public-investment
keyword: endogenous-growth
keyword: shsecohumanities-and-social-scienceseconomics-and-finance
keyword: infoeu-reposemanticsarticle
keyword: multiplicity
keyword: public-debt
keyword: deficit
landing page: 1365-1005
description: In a very interesting endogenous growth model, Futagami, Iwaisako, and Ohdoi [Macroeconomic Dynamics 12 (2008), 445-462] study the long-run growth effect of borrowing for public investment. Their model exhibits (i) the ltiplicity of balanced growth paths (BGPs) in the long run (two steady states) and (ii) a possible indeterminacy of the transition path to the high-growth BGP. The goal of this note is to show that their results depend on a sharp assumption, namely the definition of the public debt target as a ratio to private capital. If the target is defined in terms of public debt-to-GDP ratio, both results vanish: the model exhibits a unique BGP (no multiplicity) and the adjustment path to this unique equilibrium is determinate (no indeterminacy).
issued: 2026-05-10T21:37:12.900641
language: en
modified: 2026-05-10T21:37:12.900646

Debt policy rule, productive government spending, and multiple growth paths: a note
type: Distribution
access URL: https://shs.hal.science/halshs-00829552
format: HTML
issued: 2026-05-10T21:37:12.918225
modified: 2026-05-10T21:37:12.890061