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AMBIENTUM BIOETHICA BIOLOGIA CHEMIA DIGITALIA DRAMATICA EDUCATIO ARTIS GYMNAST. ENGINEERING EPHEMERIDES EUROPAEA GEOGRAPHIA GEOLOGIA HISTORIA HISTORIA ARTIUM INFORMATICA IURISPRUDENTIA MATHEMATICA MUSICA NEGOTIA OECONOMICA PHILOLOGIA PHILOSOPHIA PHYSICA POLITICA PSYCHOLOGIA-PAEDAGOGIA SOCIOLOGIA THEOLOGIA CATHOLICA THEOLOGIA CATHOLICA LATIN THEOLOGIA GR.-CATH. VARAD THEOLOGIA ORTHODOXA THEOLOGIA REF. TRANSYLVAN
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The STUDIA UNIVERSITATIS BABEŞ-BOLYAI issue article summary The summary of the selected article appears at the bottom of the page. In order to get back to the contents of the issue this article belongs to you have to access the link from the title. In order to see all the articles of the archive which have as author/co-author one of the authors mentioned below, you have to access the link from the author's name. |
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STUDIA OECONOMICA - Issue no. 1 / 2020 | |||||||
Article: |
A KEYNESIAN APPROACH TO FISCAL POLICY FOR FULL EMPLOYMENT AND CONTINUOUS TIME DEBT DYNAMICS. Authors: YASUHITO TANAKA. |
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Abstract: DOI: 10.2478/subboec-2020-0002 Published Online: 2020-04-30 Published Print: 2020-04-30 pp. 20-38 VIEW PDF FULL PDF It is widely argued that public debt is a burden on the future generations. We analyze another aspect of public debt as an economic stimulus program, that is, the measure to realize full employment from an under-employment state. Using a continuous time version of a dynamic analysis of debt-to-GDP ratio we show that a fiscal policy to realize full employment from a state of under-employment can reduce the debt-to-GDP ratio. More precisely we show that the larger the extra growth rate (increasing rate) of real GDP by a fiscal policy is, the smaller the debt-to-GDP ratio at the time when full employment is realized is. Also we show that even if the marginal propensity to consume is very small (including zero), an aggressive fiscal policy can realize full employment without increasing the debt-to-GDP ratio. Further, we consider a condition to realize full employment from a state of under-employment within one year without increasing debt-to-GDP ratio. JEL Classification: E12, E24, E62 Keywords: full employment, debt-to-GDP ratio, continuous time debt dynamics |
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