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The effect of the behavior of an average consumer on the public debt dynamics

Roberto De Luca, Marco Di Mauro, Angelo Falzarano, Adele Naddeo

posted on 03 July 2017

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An important issue within the present economic crisis is understanding the dynamics of the public debt of a given country, and how the behavior of average consumers and tax payers in that country affects it. Starting from a model of the average consumer behavior introduced earlier by the authors, we propose a simple model to quantitatively address this issue. The model is then studied and analytically solved under some reasonable simplifying assumptions. In this way we obtain a condition under which the public debt steadily decreases.