Fiscal policy and growth with complementarities and constraints on government


Misch, Florian ; Gemmell, Norman ; Kneller, Richard


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URL: http://ub-madoc.bib.uni-mannheim.de/3146
URN: urn:nbn:de:bsz:180-madoc-31467
Document Type: Working paper
Year of publication: 2011
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: E62 H21 H50 O40 ,
Subject headings (SWD): Finanzpolitik , Öffentliche Ausgaben , Endogenes Wirtschaftswachstum , Finanzreform
Keywords (English): Imperfect knowledge , economic growth , productive public spending , optimal fiscal policy
Abstract: This paper considers the implications of complementarity in private production and constraints on government for optimal fiscal policy. Using an endogenous growth model with public finance, it derives three central results which modify findings in the literature under standard assumptions. First, it shows that optimal public spending composition and taxation are interrelated so that first- and second-best fiscal policies differ. Second, it shows that the growth-maximizing fiscal policy is affected by preference parameters. Third, it shows that with budget rigidities and informational limitations, knowledge about the optimal fiscal policy parameter values is not necessary for growth-enhancing fiscal policy adjustments.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Misch, Florian ; Gemmell, Norman ; Kneller, Richard (2011) Fiscal policy and growth with complementarities and constraints on government. Open Access [Working paper]
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