Government Spending in a Monetary Model of Endogenous Growth: a Note

Stefano Bosi ()
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Stefano Bosi: EPEE, Université d’Evry

No 00-11, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: Few endogenous growth models are able to encompass unbalanced transitional dynamics. In Barro (1990) public spending is a productive externality and growth is only regular. The second best tax rate equals the public spending return. We provide a monetary version of Barro (1990), where short-run fluctuations are due to money and long-run effects to technology. Barro rule is found to be surprisingly robust within transition.

Keywords: cash-in-advance; endogenous growth; indeterminacy (search for similar items in EconPapers)
JEL-codes: D90 E32 E50 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2000
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