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Government for the People: On the Determinants of the Size of U.S. Government

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Listed:
  • Mr. Tamim Bayoumi
  • Fernando M. Gonçalves

Abstract

Trends in the size of U.S. government are examined. In the postwar period, general government primary spending rose by ¼ percent of GDP a year through 1975, stabilizing thereafter. With higher social transfers offset by a lower burden of defense spending, expansion reflected a baby-boom driven rise in education spending. The parallel improvement in tax efficiency helped equate the benefits of higher spending with the costs from higher taxation, in accordance with a marginalist view of the size of government. Looking forward, the retirement of baby boomers appears likely to expand government and lead to a more efficient tax system.

Suggested Citation

  • Mr. Tamim Bayoumi & Fernando M. Gonçalves, 2007. "Government for the People: On the Determinants of the Size of U.S. Government," IMF Working Papers 2007/289, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/289
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    References listed on IDEAS

    as
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