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Public Expenditures, Taxes, Federal Transfers, and Endogenous Growth

Author Info

Listed author(s):
  • Liutang Gong

    (Guanghua School of Management, Peking University)

  • Heng-fu Zou

    (CEMA, Central University of Finance and Economics
    Shenzhen University
    Wuhan University
    The World Bank)

Abstract

This paper extends the Barro (1990) model with single aggregate government spending and one flat income tax to include public expenditures and taxes by multiple levels of government. It derives the rate of endogenous growth and, with both simulations and special examples, examines how that rate changes with respect to federal income tax, local taxes, and federal transfers. It also discusses the growth and welfare-maximizing choices of taxes and federal transfers.

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File URL: http://down.aefweb.net/WorkingPapers/w524.pdf
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Paper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 524.

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Length: 21 pages
Date of creation: 2011
Handle: RePEc:cuf:wpaper:524
Contact details of provider: Web page: http://cema.cufe.edu.cn/

More information through EDIRC

Keywords: Public expenditures; Taxes; Federal transfers; Endogenous growth;

Other versions of this item:

Find related papers by JEL classification:
  • E0 - Macroeconomics and Monetary Economics - - General
  • H2 - Public Economics - - Taxation, Subsidies, and Revenue
  • H4 - Public Economics - - Publicly Provided Goods
  • H5 - Public Economics - - National Government Expenditures and Related Policies
  • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
  • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
  • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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  1. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-243, June.
  2. Glomm, Gerhard & Ravikumar, B., 1994. "Public investment in infrastructure in a simple growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1173-1187, November.
  3. King, Robert G & Rebelo, Sergio, 1990. "Public Policy and Economic Growth: Developing Neoclassical Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 126-150, October.
  4. Zhang, Tao & Zou, Heng-fu, 1998. "Fiscal decentralization, public spending, and economic growth in China," Journal of Public Economics, Elsevier, vol. 67(2), pages 221-240, February.
  5. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association, vol. 46(2), pages 207-27, June.
  6. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
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Cited by:

  1. Liutang Gong & Heng-fu Zou, 2003. "Fiscal Federalism, Public Capital Formation, and Endogenous Growth," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 471-490, November.
  2. Hsun Chu & Ching-Chong Lai & Chu-Chuan Cheng, 2015. "Tax Havens, Growth, and Welfare," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 802-823, December.
  3. Liutang Gong & Heng-fu Zou, 1998. "Fiscal Policies in a Finite Horizon Model with the Spirit of Capitalism," CEMA Working Papers 102, China Economics and Management Academy, Central University of Finance and Economics.

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