International Tax and Public Finance

, Volume 12, Issue 1, pp 47–59

Public Debt, Human Capital Formation, and Dynamic Inefficiency

Article

Abstract

The present paper considers public debt in an economy where human capital formation sustains long-run per capita income growth. It shows that contrary to what has been obtained in other types of endogenous growth economies public debt may benefit current and future generations by removing dynamic inefficiency.

Key Words

public debt human capital endogenous growth 

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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Erlangen-NurembergNuremberg

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