Nishimura, Kazuo; Nourry, Carine; Seegmuller, Thomas; … - HAL - 2014
We introduce public debt in a Ramsey model with heterogenous agents and a public spending externality affecting utility … which is financed by income tax and public debt. We show that public debt considered as a fixed portion of GDP can have a … the elasticity of capital labor substitution is low enough, public debt can only be destabilizing, generating damped or …