@article{oai:nagoya.repo.nii.ac.jp:00030521,
 author = {Tamai, Toshiki and Kamiguchi, Akira},
 issue = {E20-3},
 journal = {Economic Research Center Discussion Paper},
 month = {Sep},
 note = {Public investment is one of central issues in the dynamic analyses on fiscal policy and economic growth. Debt financing for public investment and its effects has been recently focused because the interest rates has been low and almost remain below economic growth rates. This paper examines the impacts of debt-financed public investment subject to a simple fiscal rule in an overlapping generations model with public capital. This topic includes capital budgeting and the debt/deficit criterion of Maastricht treaty. We show that debt financing for public investment enhances economic  growth if the economy is dynamically inefficient and public capital has sufficiently large productivity effect while it reduces economic growth rates in the dynamically efficient economy. Debt and growth could have a monotonic or non-monotonic relationship, depending on steady-state  interest rate, growth rate, and productivity effect of public investment. The debt-growth relations match with controversial empirical evidences. Furthermore, existing generations choose perfect debt finance, so-called golden rule of public finance, if dynamic inefficiency exists. In  contrast, balanced budget is preferred in a dynamically efficient economy with low productivity effect of public capital. However, an economy with high productivity effect of public capital may choose debt financing. This paper contributes to the understanding of the currently focused issues of public investment., This work was supported by JSPS KAKENHI Grant Number 16H03625, 18H00865, 19K13731.},
 pages = {1--27},
 title = {Public Investment, National Debt, and Economic Growth : The Role of Debt Finance under Dynamic Inefficiency},
 year = {2020}
}