Optimal debt, endogenous fertility, and human capital externalities in a model with altruistic bequests

Zhang, Jie (2003) Optimal debt, endogenous fertility, and human capital externalities in a model with altruistic bequests. Journal of Public Economics, 87 7-8: 1825-1835. doi:10.1016/S0047-2727(01)00195-5

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Author Zhang, Jie
Title Optimal debt, endogenous fertility, and human capital externalities in a model with altruistic bequests
Journal name Journal of Public Economics   Check publisher's open access policy
ISSN 0047-2727
Publication date 2003-08-01
Sub-type Article (original research)
DOI 10.1016/S0047-2727(01)00195-5
Open Access Status Not Open Access
Volume 87
Issue 7-8
Start page 1825
End page 1835
Total pages 11
Editor R. Boadway
J. Poterba
Place of publication Netherlands
Publisher Elsevier
Language eng
Subject C1
340209 Public Sector Economics
720101 Fiscal policy
Abstract and human capital externalities. Because of such externalities, education investment is too low and fertility is too high. While education subsidies are the conventional means to deal with these problems, we show that the optimal policy also comprises debt even when distortionary taxes are used. The reason is that debt tips the usual trade-off between children's quantity and quality in favor of the latter by increasing the bequest cost of children. The optimal debt-output ratio exceeds 10% for plausible parameterization. (C) 2002 Elsevier B.V. All rights reserved.
Keyword Economics
Growth
Transitional Dynamics
Optimal Debt
Externality
Q-Index Code C1

Document type: Journal Article
Sub-type: Article (original research)
Collections: Excellence in Research Australia (ERA) - Collection
2004 Higher Education Research Data Collection
School of Economics Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 13 times in Thomson Reuters Web of Science Article | Citations
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Created: Wed, 15 Aug 2007, 12:47:52 EST