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Endogenous Growth, Government Debt and Budgetary Regimes : A Corrigendum

Author

Listed:
  • Alexandru Minea

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Patrick Villieu

    (LEO - Laboratoire d'économie d'Orleans [2008-2011] - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

Abstract

We correct an error in [Greiner, A., Semmler, W., 2000. Endogenous growth, government debt and budgetary regimes. Journal of Macroeconomics 22, 363-384] concerning the effect of different debt rules on long term economic growth. We focus on Proposition1 stating that, in some cases, using deficits to finance productive public expenditures, may raise long term economic growth. We propose an analytical proof, showing that the cases in which deficits raise the balanced growth path imply Ponzi games and are, therefore, infeasible. Consequently, using deficits to finance public investment is always detrimental to economic growth in the long-run in their model.

Suggested Citation

  • Alexandru Minea & Patrick Villieu, 2010. "Endogenous Growth, Government Debt and Budgetary Regimes : A Corrigendum," Post-Print halshs-00630713, HAL.
    • Handle: RePEc:hal:journl:halshs-00630713
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    Citations

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    Cited by:

    1. Shobande Olatunji Abdul, 2020. "Fiscal Rule in Africa," Open Economics, De Gruyter, vol. 3(1), pages 112-120, January.
    2. Maxime Menuet, 2019. "Fiscal rule and shock amplification : A stochastic endogenous growth model," Working Papers hal-02153887, HAL.
    3. Fred Eka, 2019. "IDE chinois et croissance économique des pays d'Afrique sub-saharienne : approche par la MMG en données de panel," Working Papers hal-02141049, HAL.
    4. Apeti, Ablam Estel & Combes, Jean-Louis & Minea, Alexandru, 2023. "Inflation targeting and the composition of public expenditure: Evidence from developing countries," Journal of Macroeconomics, Elsevier, vol. 76(C).
    5. Campeanu Emilia & Gyorgy Attila, 2012. "How Can Romanian Government Boost Economic Growth?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 436-442, December.
    6. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2015. "Deficit Rules and Monetization in a Growth Model with Multiplicity and Indeterminacy," Working Papers halshs-01199774, HAL.
    7. Maxime MENUET & Alexandru MINEA & Patrick VILLIEU, 2017. "Public Debt, Endogenous Growth Cycles and Indeterminacy," LEO Working Papers / DR LEO 2467, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    8. Fred EKA, 2019. "IDE chinois et croissance économique des pays d'Afrique sub-saharienne : approche par la MMG en données de panel," Working Papers 2018-2019_6, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Feb 2019.
    9. Maxime Menuet & Alexandru Minea & Patrick Villieu, 2018. "Deficit, monetization, and economic growth: a case for multiplicity and indeterminacy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 819-853, June.
    10. Ehrhart, Hélène & Minea, Alexandru & Villieu, Patrick, 2014. "Debt, seigniorage, and the Growth Laffer Curve in developing countries," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 199-210.
    11. Andrzej Paczoski & Solomon T. Abebe & Giuseppe T. Cirella, 2019. "Debt and Deficit Growth Rate Reporting for Post-Communist European Union Member States," Social Sciences, MDPI, vol. 8(6), pages 1-17, June.
    12. Uryszek Tomasz, 2015. "Long-term Sustainability Of Public Finance In The Central And Eastern EU Member States / Długoterminowe Zrównoważenie Finansów Publicznych w Krajach Europy Środkowej i Wschodniej Należących Do Ue," Comparative Economic Research, Sciendo, vol. 18(4), pages 47-61, December.
    13. Max Groneck, 2011. "The golden rule of public finance and the composition of government expenditures: a growth and welfare analysis," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 14(4), pages 273-294, December.
    14. Ueshina, Mitsuru, 2018. "The effect of public debt on growth and welfare under the golden rule of public finance," Journal of Macroeconomics, Elsevier, vol. 55(C), pages 1-11.

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