GROWTH, BUDGET DEFICITS, AND FISCAL-POLICIES IN AN OVERLAPPING GENERATIONS MODEL

Analyzing an overlapping generations model with growing endowments and a government sector that is permitted to have a budget deficit forces the real interest factor to deviate from Samuelson's biological interest factor. Fiscal policies then affect the real interest factor, which in turn has consequences both for the direction and the effectiveness of those fiscal policies. These consequences depend upon the borrowing position of the young. © 1991 Springer-Verlag.