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Golden Rule (fiscal policy)

About: Golden Rule (fiscal policy) is a research topic. Over the lifetime, 661 publications have been published within this topic receiving 9789 citations.


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Journal ArticleDOI
TL;DR: In this article, the authors established sufficient technological conditions under which, for any feasible set of well-behaved preferences, stationary over-investment relative to the Golden Rule is ruled out and the economy's steady state equilibria are therefore dynamically efficient.

40 citations

Journal ArticleDOI
TL;DR: In this paper, the authors present the results of an application of Golden Rule procedures to items of the Scholastic Aptitude Test and show that the procedures are ineffective in detecting biased items and may undermine the reliability and validity of tests.
Abstract: The authors present the results of an application of Golden Rule procedures to items of the Scholastic Aptitude Test. Using item response theory, their analyses indicate that the Golden Rule procedures are ineffective in detecting biased items and may undermine the reliability and validity of tests.

40 citations

Journal ArticleDOI
TL;DR: This article showed that in the long run the social opportunity cost of debt-financed public investment exceeds the social cost of tax-funded public investments, if the social rate of time preference is lower than the interest rate on government borrowing.

40 citations

Posted Content
TL;DR: This paper used the life-cycle growth model to clarify the implications of government involvement in capital accumulation, arguing that a long-run trade-off between consumption possibilities is critical to long run optimality.
Abstract: The author uses the life-cycle growth model to clarify the implications of government involvement in capital accumulation, arguing that a long-run trade-off between consumption possibilities is critical to long-run optimality. The long-run capital/labor ratio is shown to determine the amount that each member of a given generation will consume in each period of his lifetime. With the option of redistributing income between generations, the optimal path of a centrally planned economy is less-restrictive. This is not true in the case of government activities financed by debt, which suggests the government's desired role at present is to provide a mechanism for redistributing income between the younger and older generations.

39 citations

Journal ArticleDOI
TL;DR: In this article, a vector autoregressive (VAR) model was used to estimate the effect of public investment on the Eurozone's economic performance, and it was shown that public investment is a significant determinant of output, but to a lesser extent than public capital.
Abstract: This paper addresses the issue of whether and by how much public investment or public capital can increase GDP. In comparison with the literature on the subject, we apply many different methodologies to answer these questions. A vector autoregressive (VAR) model (for France, Italy, Germany, the UK and the USA), a panel composed of 6 European countries (Austria, Belgium, France, Germany, Italy and the Netherlands) and a regional panel (French regions) are estimated. Public investment is shown to be a significant determinant of output; this is also true for public capital but to a lesser extent than public investment with a VAR methodology. The size of the estimated coefficient is also more realistic than those obtained in the literature. This empirical result confirms that the focus of some economists on safeguarding the level of public investment is not misplaced. The debate on the introduction of a ‘golden rule of public finance’ in the European Monetary Union is legitimate in this respect.

37 citations


Performance
Metrics
No. of papers in the topic in previous years
YearPapers
20218
202024
201922
201821
201733
201626