Logo
Munich Personal RePEc Archive

Productive government expenditure and fiscal sustainability

Arai, Real (2008): Productive government expenditure and fiscal sustainability. Forthcoming in:

Warning
There is a more recent version of this item available.
[thumbnail of MPRA_paper_8553.pdf]
Preview
PDF
MPRA_paper_8553.pdf

Download (135kB) | Preview

Abstract

We consider an overlapping generations model in which public spending directly contributes to grow up productivity as Barro (1990) and a government comforts the constant spending-GDP and debtspending ratio rules. We analyse policy effects on fiscal sustainability, growth rate and welfare. This paper gives some remarks as follows: First, we demonstrate that when spending-GDP ratio rises it may be more sustainable fiscal policy. Second, we show analytically that if higher spending-GDP ratio is more sustainable fiscal policy, it brings higher growth rate in both short-term and long-term. Third, such policy change is Pareto improving. These remarks are not obtained in previous researches on fiscal sustainability.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.