Fiscal Policy, Adjustment Costs, and Endogenous Growth
AbstractThis paper develops a one-sector endogenous growth model in which investment incurs convex adjustment costs. Conditions for the existence of a balanced growth path are discussed. Fiscal issues are analyzed in a circumstance in which the government uses tax revenues to finance public expenditures that impact on both the productivity of the existing capital stock and adjustments costs. The effect of these costs on the equilibrium growth rate and on the effectiveness of fiscal policy is discussed. Optimal fiscal policy is derived and the role of adjustment costs and congestion in determining the trade-off between different taxes is considered. Copyright 1996 by Royal Economic Society.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 48 (1996)
Issue (Month): 3 (July)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.