Building on Paul Samuelson's seminal work concerning consumption loans between individuals of different generations, this paper pioneered the analysis of overlapping generations (OLG) models with durable capital goods. It illumi- nated the properties of such models through two fundamental contributions. First, it demonstrated that the competitive equilibria of infinite horizon OLG models can be inefficient, even in the absence of conventional market failures. Second, it identified the mechanisms through which both external and internal debt can potentially reduce the capital stock. In clarifying the general equilibrium effects of displacing physical capital with government debt in individuals' portfolios, it resolved a long-standing debate concerning the feasibility of using internal debt to shift the burden of paying for public expenditures to future generations