The Intergenerational Incidence of Government Spending

Kim‐heng Tan

The Economic Record, 1995, vol. 71, issue 1, 54-65

Abstract: This paper analyzes the effect of an increase in government spending on the welfare of different generations in a dynamic general equilibrium model. The paper shows that the intergenerational incidence of government spending on a public good is determined not only by the welfare effects due to the public good and to financing the good but also by a welfare effect due to intertemporal substitution between private consumption when government spending is increased. The degree of substitutability between private consumption and public spending is shown to be a key determinant of this incidence.

Date: 1995
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https://doi.org/10.1111/j.1475-4932.1995.tb01871.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:ecorec:v:71:y:1995:i:1:p:54-65

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