Fiscal Federalism and Economic Growth

Jan Brueckner

No 1601, CESifo Working Paper Series from CESifo

Abstract: This paper uses an endogenous-growth model with overlapping generations to explore the connection between fiscal federalism and economic growth. The analysis shows that federalism, which allows public-good levels to be tailored to suit the differing demands of young and old consumers, who live in different jurisdictions, increases the incentive to save. This stronger incentive in turn leads to an increase in investment in human capital, and a byproduct of this higher investment is faster economic growth.

Keywords: fiscal federalism; overlapping generations; economic growth; human capital (search for similar items in EconPapers)
JEL-codes: H10 H70 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Fiscal federalism and economic growth (2006)
Working Paper: Fiscal Federalism and Economic Growth (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1601

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