Fiscal Federalism and Economic Growth

Jan K. Brueckner ()

No CESifo Working Paper No. 1601, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper uses an endogenous-growth model with overlapping generations to explore the connection between fiscal federalism and economic growth. The analysis shows that federalism, which allows public-good levels to be tailored to suit the differing demands of young and old consumers, who live in different jurisdictions, increases the incentive to save. This stronger incentive in turn leads to an increase in investment in human capital, and a byproduct of this higher investment is faster economic growth.

JEL-codes: H10 H70 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-ure
Date: 2005
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Related works:
Working Paper: Fiscal Federalism and Economic Growth (2005)
Journal Article: Fiscal federalism and economic growth (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:ces:ceswps:_1601

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