EconPapers    
Economics at your fingertips  
 

Public Policy and Economic Growth: Developing Neoclassical Implications

Robert King () and Sergio Rebelo ()

Journal of Political Economy, 1990, vol. 98, issue 5, S126-50

Abstract: Why do the countries of the world display considerable disparity in long-term growth rates? This paper examines the hypothesis that the answer lies in differences in national public policies that affect the incentives that individuals have to accumulate capital in both its physical and human forms. The authors' analysis of a calibrated two-sector endogenous growth model shows that the incentive effects of taxation can induce large differences in long-run growth rates. This influence of taxation on the rate of economic growth has important welfare implications: in basic endogenous growth models, the welfare cost of a 10 percent increase in the rate of income tax can be forty times larger than in the basic neoclassical model. Copyright 1990 by University of Chicago Press.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (518)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-3808%2819901 ... O%3B2-I&origin=repec full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JPE for details.

Related works:
Working Paper: Public Policy and Economic Growth: Developing Neoclassical Implications (1990) Downloads
Working Paper: PUBLIC POLICY AND ECONOMIC GROWTH: DEVELOPING NEOCLASSICAL IMPLICATIONS (1988)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:v:98:y:1990:i:5:p:s126-50

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

 
Page updated 2025-03-20
Handle: RePEc:ucp:jpolec:v:98:y:1990:i:5:p:s126-50