Arai, Real (2008): Productive government expenditure and fiscal sustainability.
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We consider an overlapping generations model in which public spending directly contributes to grow up productivity as Barro (1990) and a government comforms 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.
|Item Type:||MPRA Paper|
|Original Title:||Productive government expenditure and fiscal sustainability|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy
H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock
H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt ; Debt Management ; Sovereign Debt
|Depositing User:||Real Arai|
|Date Deposited:||03. May 2008 10:29|
|Last Modified:||21. Feb 2013 14:34|
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