SFB 303 Discussion Paper No. A - 241
Author: Wildasin, David E.
Title: Non-Neutrallity of Debt with Endogenous Fertility
Abstract: This paper examines the impact of government borrowing on the real
equilibrium of an economy with intergenerational or dynastic utility
maximizers and endogenous fertility. In general, incremental government
borrowing reduces fertility. In addition, borrowing may increase per head
consumption and lower the aggregate capital stock. At the same time, it may
raise the capital/labor ratio and the wage/rental ratio, lower utility per
head for the current generation, and raise utility per head of future
generations. Identical results obtain for unfunded social security programs.
Creation-Date: April 1989
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