Dynamic Fiscal Policies and Endogenous Growth

Hyun Park ()
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Hyun Park: Kyung-Hee University, Postal: Department of Economics, Kyung-Hee University, 1 Hoegi-dong,, Dongdaemun-gu, Seoul 130-701, Korea

Journal of Economic Integration, 2005, vol. 20, 347-365

Abstract:

This paper studies the dynamic properties of an endogenous growth model in which government consumption and production services are financed by capital taxes. I generalize the existence and its stability property of commitment Ramsey equilibria when government spending is productive and taxation is distortionary. I then establish a sufficient condition for uniqueness of the (positive) balanced growth path and determinacy of transitional dynamics. The same sufficient condition ensures growth convergence in Barro-type endogenous fiscal policies. This modeling approach can be used by a large class of endogenous growth models which allow for market imperfections and optimal policies. In particular, a few implications for main results are discussed on economic integration.

Keywords: Optimal tax policy; Transitional dynamics; Determinacy; Growth convergence (search for similar items in EconPapers)
JEL-codes: D90 H21 O38 (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0319

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