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Fiscal Policy and Economic Growth
Author(s) -
Zagler Martin,
Dürnecker Georg
Publication year - 2003
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/1467-6419.00199
Subject(s) - economics , fiscal policy , ricardian equivalence , externality , equivalence (formal languages) , tax revenue , macroeconomics , government expenditure , government revenue , stabilization policy , revenue , tax policy , public economics , monetary economics , public finance , microeconomics , monetary policy , tax reform , finance , linguistics , philosophy
This paper surveys the literature on fiscal policy and economic growth. We present a unifying framework for the analysis of long run growth implications of government expenditures and revenues. We find that several tax rates and expenditure categories exhibit a direct impact on the growth rate of the economy. In a creative synthesis we have assigned the relevant literature to the twelve introduced policy variables. Due to the equivalence of some policy variables we are left with six degrees of freedom, where we need four to internalize the model’s intrinsic externalities, leaving two instruments to conduct short run fiscal policy.