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ディスカッション／ワーキング・ペーパー

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Discussion Papers In Economics And Business. 2015, 14-23-Rev.2, p. 1-37

Intergenerational Politics, Government Debt, and Economic Growth

Ono, Tetsuo

Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University

英語

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2015-06

http://www2.econ.osaka-u.ac.jp/library/global/dp/1423R2.pdf

This study presents a two-period overlapping-generations model featuring intergenerational conflict over fiscal policy. In particular, we characterize a Markov-perfect political equilibrium of the voting game between generations and show the following three main results. First, population aging incentivizes the government to invest more in capital for future public spending, positively affecting economic growth. Second, when the government finances its spending by issuing bonds, the introduction of the balanced budget rule results in a higher public spending-to-GDP ratio and a higher growth rate. Third, to obtain a normative implication of the political equilibrium, we compare it with an allocation chosen by a benevolent planner who takes care of all future generations. The planners allocation might feature less growth and more borrowing than the political equilibrium if the planner attaches low weights to future generations.

39420

Intergenerational Politics, Government Debt, and Economic Growth

Ono, Tetsuo

Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University

英語

2015-06

Discussion Papers In Economics And Business

14-23-Rev.2

1

37

https://hdl.handle.net/11094/39420

http://www2.econ.osaka-u.ac.jp/library/global/dp/1423R2.pdf