The last shall be first: Efficient constraints on foreign borrowing in a model of endogenous growth

@inproceedings{Chamley1992TheLS,
  title={The last shall be first: Efficient constraints on foreign borrowing in a model of endogenous growth},
  author={Christophe Chamley},
  year={1992}
}
Abstract In an open economy with a trade-off between production and productivity growth and with externalities in productivity growth, it is shown that a restriction on foreign borrowing in the short-run can increase welfare. In the long-run a subsidy is efficient. When the fiscal instrument is the tax on foreign borrowing, it is possible that non-dampened cycles of tax rates are efficient. 

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