National Debt, Borrowing Constraints, and Human Capital Accumulation in an Endogenous Growth Model

Abstract

This paper presents an overlapping-generations endogenous growth model of human capital accumulation with borrowing constrained young individuals. On a small open economys equilibrium growth path, production, human capital, and physical capital all grow at a uniform rate that depends, apart from a vector of parameters, only on the amount of time that decentrally optimizing, borrowing constrained private households allocate to education and training. An increase in public debt that is used to redistribute tax burdens from every individuals youth to his middle age raises the equilibrium growth rate of the economy and improves the intertemporal allocation of resources.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 48 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.