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Fiscal Policy and Long-Run Growth

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  • Vito Tanzi
  • Howell H. Zee

Abstract

This paper discusses in a systematic and comprehensive way the existing literature on the relationship between the growth of countries' economies and various public finance instruments, such as tax policy, expenditure policy, and overall budgetary policy, from the perspectives of allocative efficiency, macroeconomic stability, and income distribution. It reviews both the conceptual linkages between each of the instruments and growth and the empirical evidence of such relationships. The paper broadly concludes that fiscal policy could play a fundamental role in affecting the longrun growth performance of countries.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 96/119.

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Length: 36
Date of creation: 01 Oct 1996
Date of revision:
Handle: RePEc:imf:imfwpa:96/119

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  2. Joshua Aizenman & Nancy Marion, 1991. "Policy Uncertainty, Persistence and Growth," NBER Working Papers 3848, National Bureau of Economic Research, Inc.
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  18. B. Douglas Bernheim, 1987. "Ricardian Equivalence: An Evaluation of Theory and Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1987, Volume 2, pages 263-316 National Bureau of Economic Research, Inc.
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  24. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
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