Public Expenditure, Environment, and Economic Growth
AbstractThis paper attempts to develop a model of endogenous growth with special consideration to the role of productive public expenditure in the presence of congestion effect of private capital and environmental pollution. We analyze the properties of the optimal fiscal policy in the steady-state equilibrium when the level of production of the final good is the source of emission. Government allocates its income tax revenue between pollution abatement expenditure and productive public expenditure. In the steady-state equilibrium, optimum ratio of productive public expenditure to national income is less than the competitive output share of the public input; and this ratio varies inversely with the magnitude of the emission-output coefficient. The steady-state equilibrium appears to be a saddle point; and the market economy growth rate is not necessarily less than the socially efficient growth rate in the steady-state equilibrium. Copyright � 2010 Wiley Periodicals, Inc..
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Bibliographic InfoArticle provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 12 (2010)
Issue (Month): 6 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1097-3923
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- Bhattacharyya, Chandril, 2014. "A Note on Endogenous Growth with Public Capital," MPRA Paper 55728, University Library of Munich, Germany.
- Bhattacharyya, Chandril & Gupta, Manash Ranjan, 2014. "Unionised labour market, environment and endogenous growth," MPRA Paper 55416, University Library of Munich, Germany.
- San Martín Lizarralde, Marta & Barañano Mentxaka, Ilaski, 2014. "Foreign Aid Linked to Infrastructure and/or Pollution Abatement," IKERLANAK, Universidad del PaÃs Vasco - Departamento de Fundamentos del AnÃ¡lisis EconÃ³mico I Ikerlanak;2014-78, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
- Ramón López & Amparo Palacios, 2014. "Why has Europe Become Environmentally Cleaner? Decomposing the Roles of Fiscal, Trade and Environmental Policies," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 58(1), pages 91-108, May.
- Chu, Hsun & Lai, Ching-Chong & Cheng, Chu-Chuan, 2013. "Tax Havens, Growth, and Welfare," MPRA Paper 52878, University Library of Munich, Germany, revised Sep 2013.
- Bhattacharyya, Chandril & Gupta, Manash Ranjan, 2014. "Unionised Labour Market, Unemployment Allowances, Productive Public Expenditure and Endogenous Growth," MPRA Paper 56491, University Library of Munich, Germany.
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