Growth effects of fiscal policy in presence of altruism and human capital

Fernando Sánchez-Losada

Annals of Economics and Statistics, 2004, issue 73, 53-61

Abstract: We analyze the relationship between economic growth and fiscal policy in an overlapping generations economy with joy-of-giving altruism, where endogenous growth is driven by the accumulation of human capital through formal schooling. The government finances public expenditure through labor income taxes and debt. We show that for each public expenditure level there exists a debt level that maximizes the economic growth rate.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2004:i:73:p:53-61

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