Fiscal Policy and Endogenous Growth with Public Infrastructure

Pierre-Richard Agénor

Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester

Abstract: Optimal tax and spending allocation rules are derived in an endogenous growth model in which raw labor must be educated to become productive and infrastructure services affect the schooling technology. The optimal tax rate is found to depend only on the elasticities of output with respect to infrastructure services and educated labor. The optimal share of spending on infrastructure (relative to education) depends also on these elasticities, as well as the quality of schooling and the degree to which infrastructure services affect the production of educated labor. Congestion costs in education tend to raise the optimal share of spending on infrastructure.

Pages: 34 pages
Date: 2005
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://hummedia.manchester.ac.uk/schools/soss/cgb ... papers/dpcgbcr59.pdf (application/pdf)

Related works:
Journal Article: Fiscal policy and endogenous growth with public infrastructure (2008)
Working Paper: Fiscal Policy and Endogenous Growth with Public Infrastructure (2005)
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:man:cgbcrp:59

Access Statistics for this paper

More papers in Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Patrick Macnamara ().