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Public Expenditures, Taxes, Federal Transfers, and Endogenous Growth
Author(s) -
GONG LIUTANG,
ZOU HENGFU
Publication year - 2011
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2011.01529.x
Subject(s) - economics , endogenous growth theory , welfare , public spending , government spending , government (linguistics) , tax rate , public economics , macroeconomics , market economy , human capital , politics , linguistics , philosophy , political science , law
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.