Fiscal Policy, Employment And Growth: Why Is Continental Europe Lagging Behind?
In this paper we analyse the impact of distortionary taxes, transfers related to structural nonemployment and productive government expenditures on employment and long-run growth. Our theoretical model builds on Barro (JPE, 1990) which we extend by endogenizing the decision to work and by allowing two kinds of government expenditures. The model explains what we basically observe in the data: (i) higher growth and employment in the US (low taxes and low transfers related to structural non-employment), (ii) higher growth and employment in Scandinavia (high taxes, but high productive expenditures and low transfers related to structural non-employment) and (iii) lower growth and poor employment in continental Europe (high taxes, high transfers, lower productive government expenditures).
|Date of creation:||Nov 2004|
|Date of revision:|
|Contact details of provider:|| Postal: Hoveniersberg 4, B-9000 Gent|
Phone: ++ 32 (0) 9 264 34 61
Fax: ++ 32 (0) 9 264 35 92
Web page: http://www.ugent.be/eb
More information through EDIRC
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.:
- Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, M.E. Sharpe, Inc., vol. 47(4), pages 6-16, July.
When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:04/275. 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: (Nathalie Verhaeghe)
If references are entirely missing, you can add them using this form.