A Model of Economic Growth with Public Finance: Dynamics and Analytic Solution
AbstractThis paper studies the equilibrium dynamics of a growth model with public finance where two different allocations of public resources are considered. The model simultaneously determines the optimal shares of consumption, capital accumulation, taxes and composition of the two different public expenditures which maximize a representative household s lifetime utilities in a centralized economy. The analysis supplies a closed form solution. Moreover, with one restriction on the parameters (?=?) we fully determine the solutions path for all variables of the model and determine the conditions for balanced growth.
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Bibliographic InfoPaper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 201229.
Date of creation: 2012
Date of revision:
growth models; fiscal policy; public spending composition;
Other versions of this item:
- Oliviero A. Carboni & Paolo Russu, 2013. "A Model of Economic Growth with Public Finance: Dynamics and Analytic Solution," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 1-13.
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- 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-2012-11-24 (All new papers)
- NEP-DGE-2012-11-24 (Dynamic General Equilibrium)
- NEP-FDG-2012-11-24 (Financial Development & Growth)
- NEP-PBE-2012-11-24 (Public Economics)
- NEP-PUB-2012-11-24 (Public Finance)
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