Starting point of this book is the observation that an increase in public debt must be accompanied by a rise in the primary surplus of the government to guarantee sustainability of public debt. The book first elaborates on that principle from a theoretical point of view and then tests whether empirical evidence for that rule can be found. Additional tests are implemented to gain furtherevidence on sustainability of public debt. In order to allow for time varyingcoefficients penalized spline estimations are performed. The theoretical chapters present endogenous growth models and assume that the primary surplus rises as public debt increases so that sustainability of public debt is given. Implications of public deficits and debt are studied assuming full employment andfor unemployment. The conclusion summarizes the findings and compares the results of the different models. Finally, policy implications are given showing how governments should deal with high public debt to GDP ratios. Demonstrates how public debt shows feedback effects affecting economic growth and welfare Gives insights into the sustainability of public debt in developed and developing countries Reveals policy implications for governments with high public debt to GDP ratios INDICE: Introduction and Overview.- Sustainability of Public Debt.- PublicDebt and Economic Growth: A Theoretical Model.- Public Debt, Productive Public Spending and Economic Growth with Full Employment.- The Role of Real Wage Rigidity and Unemployment.- Conclusion.- Non-parametric Estimation.- Some UsefulTheorems from Dynamic Optimization.- Data Sources.
- ISBN: 978-3-642-01744-5
- Editorial: Springer
- Encuadernacion: Cartoné
- Páginas: 195
- Fecha Publicación: 01/08/2009
- Nº Volúmenes: 1
- Idioma: Inglés