Public debt and full employment in a stock-flow consistent model of a corporate economy

Authors

Soon Ryoo, Adelphi UniversityFollow
Peter Skott, University of Massachusetts-AmherstFollow

Working Paper Number

2011-26

Publication Date

2011

Abstract

This paper examines the fiscal requirements for continuous full employment. We find that (i) changes in the financial behavior of households and firms require adjustments in tax rates and public debt, (ii) the stability of the steady-state solution for public debt depends on the .fiscal instrument and the household consumption function, (iii) in stable cases, a fall in government consumption (or a decline in another component of autonomous demand) requires an increase in the steady-state ratio of public debt to capital, and (iv) the steady-state tax rate may be positively or negatively related to the level of debt.

DOI

https://doi.org/10.7275/3317887

Recommended Citation

Ryoo, Soon and Skott, Peter, "Public debt and full employment in a stock-flow consistent model of a corporate economy" (2011). Economics Department Working Paper Series. 134.
https://doi.org/10.7275/3317887