Deficits and Intergenerational Welfare in Open Economies
1984 (English)Report (Other academic)
This paper deals with public debt in open economies, extending Diamond's overlapping generations model to a small open economy as well as an international equilibrium of two large economies. It focuses on the intergenerational welfare redistributions caused by an increase in public debt triggered by a temporary government budget deficit, and shows how these redistributions differ in open and closed economies. The interplay between the deficits in the government budget and the current account is also analyzed. It is shown how a single period with a government deficit can be followed by a sequence of periods with a deficit in the current account.
Place, publisher, year, edition, pages
Stockholm: IIES , 1984. , 30 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 303
IdentifiersURN: urn:nbn:se:su:diva-41325OAI: oai:DiVA.org:su-41325DiVA: diva2:329495