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A note on policy, the composition of public expenditures and economic growth

  • Ferreira, Pedro Cavalcanti
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    In this article we study the growth and welfare effects of fiscal and monetary policies in economies where public investment is part of the productive process we present four different models that share the same technology with public infrastructure as a separate argument of the production function. We show that growth is maximized at positive levels of income tax and inflation. However, unless there are no transfers or public goods in the economy, maximization of growth does not imply welfare maximization we show that the optimal tax rate is greater than the rate that maximizes growth and the optimal rate of money creation is below the growth maximizing rate. With public infrastructure in the production function we no longer obtain superneutrality in the Sidrausky model.

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    Paper provided by FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil) in its series Economics Working Papers (Ensaios Economicos da EPGE) with number 240.

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    Date of creation: May 1994
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    Handle: RePEc:fgv:epgewp:240
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    3. Barbosa, Fernando de Holanda, 1993. "Hiperinflação e a forma funcional da equação de demanda de moeda," Economics Working Papers (Ensaios Economicos da EPGE) 206, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    4. Castro, Hélio de Oliveira Portocarrero de & Oliveira, Luiz Guilherme Schymura de & Cardoso, Renato Fragelli & Magalhães, Uriel de, 1993. "Previdência social pública: a experiência brasileira," Economics Working Papers (Ensaios Economicos da EPGE) 210, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    5. Castro, Hélio de Oliveira Portocarrero de & Oliveira, Luiz Guilherme Schymura de & Cardoso, Renato Fragelli & Werlang, Sérgio Ribeiro da Costa & Magalhães, Uriel de, 1994. "Regimes complementares de previdência," Economics Working Papers (Ensaios Economicos da EPGE) 238, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    6. Barbosa, Fernando de Holanda, 1992. "A indexação dos ativos financeiros: a experiência brasileira," Economics Working Papers (Ensaios Economicos da EPGE) 194, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    7. Barbosa, Fernando de Holanda, 1990. "Mercado aberto brasileiro: análise dos procedimentos operacionais," Economics Working Papers (Ensaios Economicos da EPGE) 160, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    8. Silveira, Antonio Maria da & Barbosa, Nelson H. & Freitas, Fábio N.P. & Monteiro, Marcos de Bustamante & Vernengo, Matias & Lopes, Carlos Fernando Lagrota R., 1993. "Estudos sobre a indeterminação de senior, vol. 1," Economics Working Papers (Ensaios Economicos da EPGE) 223, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    9. Barbosa, Fernando de Holanda & Holanda, Marcos Costa & Cysne, Rubens Penha, 1988. "Underinvoicing of exports, overinvoicing of imports, and the dollar premium on the black market," Economics Working Papers (Ensaios Economicos da EPGE) 124, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    10. Barbosa, Fernando de Holanda, 1991. "A eficiência da intervenção do estado na economia," Economics Working Papers (Ensaios Economicos da EPGE) 183, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    11. Castro, Hélio de Oliveira Portocarrero de & Oliveira, Luiz Guilherme Schymura de & Cardoso, Renato Fragelli & Magalhães, Uriel de, 1993. "Os sistemas previdenciários e uma proposta para a reformulação do modelo brasileiro," Economics Working Papers (Ensaios Economicos da EPGE) 211, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    12. Barbosa, Fernando de Holanda & Brandão, Antônio Salazar Pessôa & Faro, Clovis de, 1989. "Fiscal reform and stabilization: the brazilian experience," Economics Working Papers (Ensaios Economicos da EPGE) 147, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    13. Barbosa, Fernando de Holanda & Arteiro, Hélio Lechuga & Caldas, Manuel Jeremias Leite & Pina, Mario Jorge Fróes Cardozo de, 1991. "Aspectos econômicos das empresas estatais no Brasil: telecomunicações, eletricidade e petróleo," Economics Working Papers (Ensaios Economicos da EPGE) 184, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    14. Sallum, Elvia Mureb & Barbosa, Fernando de Holanda & Oliva, Waldyr Muniz, 1991. "A dinâmica da hiperinflação," Economics Working Papers (Ensaios Economicos da EPGE) 173, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    15. Sallum, Elvia Mureb & Barbosa, Fernando de Holanda, 1992. "Hiperinflação e o Regime das Políticas Monetária-Fiscal," Economics Working Papers (Ensaios Economicos da EPGE) 190, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
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