On the (De)Stabilizing Effect of Public Debt in a Ramsey Model with Heterogeneous Agents

摘要: We introduce public debt in a Ramsey model with heterogenous agents and spending externality affecting utility which is financed by income tax debt. show that considered as fixed portion of GDP can have stabilizing or destabilizing effect depending on some fundamental elasticities. When the weak elasticity capital labor substitution low enough, only be destabilizing, generating damped persistent macroeconomic fluctuations. Whereas when are strong stabilizing, driving to monotone convergence an economy experiencing fluctuations without