Fiscal Policy and Long-Run Growth
October 1, 1996
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Summary
This paper discusses in a systematic and comprehensive way the existing literature on the relationship between the growth of countries’ economies and various public finance instruments, such as tax policy, expenditure policy, and overall budgetary policy, from the perspectives of allocative efficiency, macroeconomic stability, and income distribution. It reviews both the conceptual linkages between each of the instruments and growth and the empirical evidence on such relationships. It broadly concludes that fiscal policy could play a fundamental role in affecting the long-run growth performance of countries.
Subject: Expenditure, Fiscal policy, Human capital, Income distribution, Income inequality, Labor, National accounts
Keywords: capital, externality effect of public expenditure, fiscal policy variable, growth effect, growth theory, Human capital, income, Income distribution, income equality, Income inequality, income taxation, physical capital, private sector, private sector productivity, public expenditure, public finance, rate of change, transmission mechanism, unforeseen public expenditure, WP
Pages:
36
Volume:
1996
DOI:
Issue:
119
Series:
Working Paper No. 1996/119
Stock No:
WPIEA1191996
ISBN:
9781451854121
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 44, No. 2, June 1997.
