Government for the People: On the Determinants of the Size of U.S. Government

Tamim Bayoumi and Fernando M. Gonçalves

No 2007/289, IMF Working Papers from International Monetary Fund

Abstract: Trends in the size of U.S. government are examined. In the postwar period, general government primary spending rose by ¼ percent of GDP a year through 1975, stabilizing thereafter. With higher social transfers offset by a lower burden of defense spending, expansion reflected a baby-boom driven rise in education spending. The parallel improvement in tax efficiency helped equate the benefits of higher spending with the costs from higher taxation, in accordance with a marginalist view of the size of government. Looking forward, the retirement of baby boomers appears likely to expand government and lead to a more efficient tax system.

Keywords: WP; government; local government; United States government; spending (search for similar items in EconPapers)
Pages: 31
Date: 2007-12-01
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