Fiscal Policy in a Growing Economy with Financial Frictions and Firm Heterogeneity

Kazuo Mino

No 930, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: This paper constructs a tractable model of endogenous growth with financial frictions and fiÂ…rm heterogeneity. We introduce factor income tax, consumption tax as well as the government consumption into the base model and explore the growth effect of Â…fiscal policy. We show that from the qualitative perspective, the long-run effects of Â…fiscal actions in our model are similar to those obtained in the representative-agent models. However, the quantitative impacts of Â…fiscal policy on long-run growth in our setting can be substantially different from those established in the model where agents are homogeneous and there is no fiÂ…nancial friction.

Keywords: fiscal policy; financial constraints; firm heterogeneity; endogenous growth (search for similar items in EconPapers)
JEL-codes: D31 O41 (search for similar items in EconPapers)
Pages: 41pages
Date: 2015-11
New Economics Papers: this item is included in nep-dge and nep-mac
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http://www.kier.kyoto-u.ac.jp/DP/DP930.pdf (application/pdf)

Related works:
Journal Article: Fiscal Policy in a Growing Economy with Financial Frictions and Firm Heterogeneity (2016)
Journal Article: Fiscal Policy in a Growing Economy with Financial Frictions and Firm Heterogeneity (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:930

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