PUBLIC EXPENDITURE COMPOSITION AND GROWTH: A NEO-KALECKIAN ANALYSIS/Composition des dépenses publiques et croissance : une approche néo-kaleckienne

In this paper, we put forward a neo-Kaleckian model of growth and distribution. We introduce two different types of public expenditure: government consumption expenditure and public provision of capital; and we study the effects on equilibrium capacity utilisation and growth. Two different cases are...

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Bibliographic Details
Published in:Cahiers d'économie politique (Amiens) 2011-07, Vol.61, p.187
Main Authors: Commendatore, Pasquale, Pinto, Antonio
Format: Article
Language:English
Subjects:
Economic growth
Economic models
Expenditures
Government spending
Income distribution
Studies
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Summary:In this paper, we put forward a neo-Kaleckian model of growth and distribution. We introduce two different types of public expenditure: government consumption expenditure and public provision of capital; and we study the effects on equilibrium capacity utilisation and growth. Two different cases are explored: a) the government size is allowed to vary; b) the government size is fixed and only the composition of public expenditure changes. Our results depart from those drawn by the New Growth Theory. In fact, when capacity is underutilised, an increase in the provision of public capital may reduce the rate of growth, if not accompanied by a sufficient increase in demand. [PUBLICATION ABSTRACT]
ISSN:0154-8344
1969-6779