Endogenous Growth Through Government Policy
AbstractThis paper illustrates two reasonable political decision mechanisms by which fiscal policy generates endogenous growth under a constant returns to scale production technology, absent externalities. Based on the dynamics induced by various policy choices, we demonstrate that policies that maximize capital deepening generate balanced growth and are Pareto optimal. In contrast, policies chosen by the median voter produce balanced growth, but are suboptimal.
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Bibliographic InfoPaper provided by Claremont Colleges in its series Claremont Colleges Working Papers with number 2000-18.
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public investment; positive political economy; median voter theorem; endogenous growth;
Find related papers by JEL classification:
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-07-13 (All new papers)
- NEP-DEV-2001-07-13 (Development)
- NEP-TID-2001-07-13 (Technology & Industrial Dynamics)
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