Public Spending

Toshihiro Ihori
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Toshihiro Ihori: University of Tokyo

Chapter 5 in Public Finance in an Overlapping Generations Economy, 1996, pp 99-115 from Palgrave Macmillan

Abstract: Abstract In this chapter, we investigate positive and normative effects of public spending. Most of the previous literature on government expenditure has investigated the effect of public spending financed by lump-sum taxes (or wage income taxes with exogenous labor supply). The conventional view is that an increase in public spending, which will not contribute to stimulating production has a negative impact on capital formation due to the resource withdrawal effect.

Keywords: Public Good; Labor Supply; Real Interest Rate; Public Spending; Public Capital (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-38990-8_5

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DOI: 10.1057/9780230389908_5

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