Growth and Welfare Effects of Fiscal Policy in an Endogenous Growth Model with Public Investment
AbstractIn this paper we analyze growth and welfare effects of fiscal policy in an endogenous growth model along the balanced growth path. As to the model we assume that sustained per capita growth results from public investment. The government uses its tax revenue for investment in public capital, for investment subsidy and for transfer payments. We then analyze how the balanced growth rate reacts to variations in those policy variables. Further, we study welfare effects of varying the fiscal parameters and demonstrate that, in general, maximizing economic growth is not equivalent to maximizing welfare on the balanced growth path. Copyright Kluwer Academic Publishers 1998
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 5 (1998)
Issue (Month): 3 (July)
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Web page: http://www.springerlink.com/link.asp?id=102915
Public capital; endogenous growth; fiscal policy; welfare;
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