Fiscal Policy, Adjustment Costs, and Endogenous Growth
This 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.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 48 (1996)
Issue (Month): 3 (July)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:48:y:1996:i:3:p:361-81. See general 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.