TY  - JOUR
AU  - Buiter,Willem H.
TI  - Death, Population Growth, Productivity Growth and Debt Neutrality
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2027
PY  - 1988
Y2  - November 1988
UR  - http://www.nber.org/papers/w2027
L1  - http://www.nber.org/papers/w2027.pdf
N1  - Author contact info:
Willem H. Buiter
Citigroup Centre
Canada Square, Canary Wharf
London E14 5LB
UNITED KINGDOM
E-Mail: willembuiter@btinternet.com
AB  - Debt neutrality is said to occur if, given a program for public spending on current goods and services over time, the real equilibrium of the economy (private consumption, investment, relative prices, etc.) is independent of the pattern of government borrowing and lump-sum taxation over time. The paper brings together work of Blanchard on individual uncertain lifetimes and debt neutrality and Weil on population growth and debt neutrality. It is shown that there will be debt neutrality if and only if the sum of the rate of growth of population and the individual probability of death equals zero. If this condition holds, non-zero rates of growth of labor productivity will not destroy debt neutrality.
ER  -