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The Intergenerational Incidence of Government Spending *
Author(s) -
TAN KIMHENG
Publication year - 1995
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1995.tb01871.x
Subject(s) - consumption (sociology) , economics , welfare , government (linguistics) , government spending , private consumption , public spending , overlapping generations model , public economics , incidence (geometry) , labour economics , monetary economics , fiscal policy , market economy , political science , social science , linguistics , philosophy , physics , optics , sociology , politics , law
This paper analyzes the effect of an increase in government spending on the welfare of different generations in a dynamic general equilibrium model. The paper shows that the intergenerational incidence of government spending on a public good is determined not only by the welfare effects due to the public good and to financing the good but also by a welfare effect due to intertemporal substitution between private consumption when government spending is increased. The degree of substitutability between private consumption and public spending is shown to be a key determinant of this incidence.