Article ID Journal Published Year Pages File Type
5067685 European Economic Review 2006 16 Pages PDF
Abstract

This theoretical exercise looks at how public expenditures for bonding can change the internal dynamics of an economic system. This new approach allows for a model of growth with institutions. These institutions, called bonding institutions, will put an economic system attracted by a low and stable equilibrium output onto a path of economic growth. Questions such as under what circumstances these institutions will come into place and whether their result, a new and higher output level, is a stable outcome of the system can now be addressed.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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