Public Expenditures, Taxes, Federal Transfers, and Endogenous Growth

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 chan...

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Bibliographic Details
Published in:Journal of public economic theory 2011-12, Vol.13 (6), p.973-991
Main Authors: GONG, LIUTANG, ZOU, HENG-FU
Format: Article
Language:English
Subjects:
Expenditures
Government spending
Income taxes
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Summary: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.
ISSN:1097-3923
1467-9779
DOI:10.1111/j.1467-9779.2011.01529.x