Working Paper Number
2015-13
Publication Date
2015
Abstract
This paper examines the role of fiscal policy in the long run. We show that (i) dynamic inefficiency in a standard OLG model generates aggregate demand problems in a Keynesian setting, (ii) fiscal policy can be used to achieve full-employment growth, (iii) the required debt ratio is inversely related to both the growth rate and government consumption, and (iv) a simple and distributionally neutral tax scheme can maintain full employment in the face of variations in ‘household confidence’
Recommended Citation
Skott, Peter and Ryoo, Soon, "Functional Finance and Intergenerational Distribution In a Keynesian OLG model" (2015). Economics Department Working Paper Series. 184.
Retrieved from https://scholarworks.umass.edu/econ_workingpaper/184