Fiscal policy and government debt in alternative models of growth and distribution

Amitava Dutt

Chapter 5 in A Modern Guide to State Intervention, 2019, pp 107-130 from Edward Elgar Publishing

Abstract: Dutt introduces fiscal policy into simple models of growth and income distribution between workers and capitalists, including models with full employment growth, classical-Marxian models, and models in which aggregate demand influences economic growth. The models are first analysed for the case of a balanced fiscal budget in which all government spending is on government consumption, and are then extended to examine government deficits and the dynamics of government debt, and public investment which affects productivity growth. According to Dutt, the models imply that fiscal policy expansion is not necessarily associated with adverse effects of growth and income distribution, and that the effects depend on the structural conditions prevailing in the economy.

Keywords: Economics and Finance; Politics and Public Policy (search for similar items in EconPapers)
Date: 2019
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