Government expenditure, taxation and long-run growth
This paper assesses the effect of fiscal policy on economic growth in an AK model with endogenous labor supply. It is found that the structure of taxation and government expenditure could affect the long-run growth rate through their effect on households’ labor-leisure choice, saving-consuming choice and the proportion of government expenditure to GDP. Barro’s (1990) plausible result that the growth rate and the income tax rate have an inverted-U relationship does not always hold. In addition, based on the panel data of 31 provinces from 1997 to 2007, we investigate the link between components of government productive expenditure and economic growth. It is found that the productive expenditure does not always have a positive effect on the growth rate, and its effect exhibits regional differences. The reason is that there is an excess amount of the government productive expenditure in China or the efficiency of the government productive expenditure may be too low.
(This abstract was borrowed from another version of this item.)
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): 4 (2009)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://journal.hep.com.cn/fec/EN/1673-3444/current.shtml|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jess Benhabib & Roger E.A. Farmer, 1992.
"Indeterminacy and Increasing Returns,"
UCLA Economics Working Papers
646, UCLA Department of Economics.
- Benhabib, Jess & Farmer, Roger E.A., 1991. "Indeterminacy and Increasing Returns," Working Papers 91-59, C.V. Starr Center for Applied Economics, New York University.
- Benhabib, J. & Farmer, R.E.A, 1991. "Indeterminacy and Increasing Returns," Papers 165, Cambridge - Risk, Information & Quantity Signals.
- Barro, Robert J, 1990.
"Government Spending in a Simple Model of Endogenous Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages 103-126, October.
- Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
- Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Ortigueira, Salvador, 1998.
"Fiscal policy in an endogenous growth model with human capital accumulation,"
Journal of Monetary Economics,
Elsevier, vol. 42(2), pages 323-355, July.
- Salvador Ortigueira, 1996. "Fiscal Policy in an Endogenous Growth Model with Human Capital Accumulation," Working Papers 9609, Centro de Investigacion Economica, ITAM.
- Enrique G. Mendoza & Assaf Razin & Linda L. Tesar, 1994.
"Effective Tax Rates in Macroeconomics: Cross-Country Estimates of Tax Rates on Factor Incomes and Consumption,"
NBER Working Papers
4864, National Bureau of Economic Research, Inc.
- Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
- Mendoza, Enrique G. & Milesi-Ferretti, Gian Maria & Asea, Patrick, 1997.
"On the ineffectiveness of tax policy in altering long-run growth: Harberger's superneutrality conjecture,"
Journal of Public Economics,
Elsevier, vol. 66(1), pages 99-126, October.
- Asea, Patrick & Mendoza, Enrique G & Milesi-Ferretti, Gian Maria, 1996. "On the Ineffectiveness of Tax Policy in Altering Long- Run Growth: Harberger's Superneutrality Conjecture," CEPR Discussion Papers 1378, C.E.P.R. Discussion Papers.
- Shantayanan Devarajan & Vinaya Swaroop & Heng-fu Zou, 1996.
"The composition of public expenditure and economic growth,"
CEMA Working Papers
77, China Economics and Management Academy, Central University of Finance and Economics.
- Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
- Nancy L. Stokey & Sergio Rebelo, 1993.
"Growth Effects of Flat-Rate Taxes,"
NBER Working Papers
4426, National Bureau of Economic Research, Inc.
- Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
- Timothy J. Kehoe & Edward C. Prescott, 2002.
"Great Depressions of the Twentieth Century,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 1-18, January.
- Timothy Kehoe & Edward Prescott, 2002. "Data Appendix to Great Depressions of the Twentieth Century," Technical Appendices kehoe02, Review of Economic Dynamics.
- Jones, Larry E & Manuelli, Rodolfo E & Rossi, Peter E, 1993. "Optimal Taxation in Models of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 485-517, June.
- Jonathan Temple, 2003. "The Long-Run implications of Growth Theories," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 497-510, 07.
- Fölster, Stefan & Henrekson, Magnus, 1998.
"Growth Effects of Government Expenditure and Taxation in Rich Countries,"
Working Paper Series
503, Research Institute of Industrial Economics, revised 20 Jun 2000.
- Folster, Stefan & Henrekson, Magnus, 2001. "Growth effects of government expenditure and taxation in rich countries," European Economic Review, Elsevier, vol. 45(8), pages 1501-1520, August.
- Fölster, Stefan & Henrekson, Magnus, 2000. "Growth Effects of Government Expenditure and Taxation in Rich Countries," SSE/EFI Working Paper Series in Economics and Finance 391, Stockholm School of Economics.
- Sergio T. Rebelo, 1990.
"Long Run Policy Analysis and Long Run Growth,"
NBER Working Papers
3325, National Bureau of Economic Research, Inc.
- Michael B. Devereux & David R. F. Love, 1994. "The Effects of Factor Taxation in a Two-Sector Model of Endogenous Growth," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 509-536, August.
- Futagami, Koichi & Morita, Yuichi & Shibata, Akihisa, 1993. " Dynamic Analysis of an Endogenous Growth Model with Public Capital," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 607-625, December.
- Miller, Stephen M & Russek, Frank S, 1997.
"Fiscal Structures and Economic Growth: International Evidence,"
Western Economic Association International, vol. 35(3), pages 603-613, July.
- Stpehen M. Miller & Frank S. Russek, 1993. "Fiscal Structures and Economic Growth: International Evidence," Macroeconomics 9309001, EconWPA, revised 23 Sep 1993.
- Tanaka, Hitoshi & Iwaisako, Tatsuro & Futagami, Koichi, 2007.
"Dynamic analysis of innovation and international transfer of technology through licensing,"
Journal of International Economics,
Elsevier, vol. 73(1), pages 189-212, September.
- Hitoshi Tanaka & Tatsuro Iwaisako & Koichi Futagami, 2006. "Dynamic Analysis of Innovation and International Transfer of Technology through Licensing," Discussion Papers in Economics and Business 06-06-Rev., Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Oct 2006.
- Antonio Ladrón-de-Guevara & Salvador Ortigueira & Manuel S. Santos, 1999.
"A Two-Sector Model of Endogenous Growth with Leisure,"
Review of Economic Studies,
Oxford University Press, vol. 66(3), pages 609-631.
- Antonio Ladron de Guevara & Salvador Ortigueira & Manuel Santos, 1995. "A Two-Sector Model of Endogenous Growth with Leisure," Working Papers 9503, Centro de Investigacion Economica, ITAM.
- Ortigueira, Salvador & Santos, Manuel S. & Ladrón de Guevara, Antonio, 1995. "A two-sector model of endogenous growth with leisure," UC3M Working papers. Economics 4160, Universidad Carlos III de Madrid. Departamento de Economía.
- Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
- R. Milbourne & G. Otto & G. Voss, 2003. "Public investment and economic growth," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 527-540.
- Angelopoulos, Konstantinos & Economides, George & Kammas, Pantelis, 2007. "Tax-spending policies and economic growth: Theoretical predictions and evidence from the OECD," European Journal of Political Economy, Elsevier, vol. 23(4), pages 885-902, December.
When requesting a correction, please mention this item's handle: RePEc:spr:frecch:v:4:y:2009:i:4:p:505-525. 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: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.