For certain country contexts, it would be useful to have a separate category of government debt that represents official development assistance (ODA) debt, which often has a non-market interest rate.
One way to parameterize this made be to specify an exogenous interest rate, $r_{ODA, t}$, and amount of lending as a fraction of GDP, $\alpha_{ODA, t}$. The amount of borrowing in any period would then be $D_{ODA,t}=\alpha_{ODA,t}Y_{t}$.
The government budget constraint would become:
$D_{t+1} + D_{ODA,t} + Rev_t = (1 + r_{gov,t})D_t + (1 + r_{ODA,t})D_{ODA,t} + G_t + I_{g,t} + Pensions_t + TR_t + UBI_t $
For certain country contexts, it would be useful to have a separate category of government debt that represents official development assistance (ODA) debt, which often has a non-market interest rate.
One way to parameterize this made be to specify an exogenous interest rate,$r_{ODA, t}$ , and amount of lending as a fraction of GDP, $\alpha_{ODA, t}$ . The amount of borrowing in any period would then be $D_{ODA,t}=\alpha_{ODA,t}Y_{t}$ .
The government budget constraint would become:
$D_{t+1} + D_{ODA,t} + Rev_t = (1 + r_{gov,t})D_t + (1 + r_{ODA,t})D_{ODA,t} + G_t + I_{g,t} + Pensions_t + TR_t + UBI_t $