Endogenous growth driven by government spending under quasi-hyperbolic discounting

Minwook Kang

Economics Letters, 2025, vol. 247, issue C

Abstract: This paper examines the impact of government spending on economic growth within a quasi-hyperbolic discounting framework, integrating Barro’s (1990) and Laibson’s (1997) models. It highlights the negative effects of present bias on optimal government spending and endogenous growth rates.

Keywords: Economic growth; Government expenditure; Hyperbolic discounting; Capital subsidy; Present bias (search for similar items in EconPapers)
JEL-codes: E70 O40 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176525000114

DOI: 10.1016/j.econlet.2025.112174

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