Endogenous Growth with Public Factors and Heterogeneous Human Capital Producers

Thomas Ziesemer ()

MPRA Paper from University Library of Munich, Germany

Abstract: If government revenues from a flat-rate income tax are spent on public factors and public factors are used for human capital production and human capital is used for the production of technical progress, then a higher rate of taxation will lead to a higher rate of technical progress if steady states are not unstable. If human capital producing households have different abilities they will have different desired (Lindahl) tax rates and a golden rule is no longer an acceptable welfare function. Therefore tax policy determines the rate of technical progress without a generally accepted welfare function. People with lower abilities want lower tax rates at least in the short run. When the rate of time preference is larger than the rate of technical progress people with greater abilities want higher levels of public factors and taxes also in the long run if indirect marginal utility is inelastic with respect to net income. The outcome of this political decision will determine the rate of technical progress.

Keywords: Endogenous growth; human capital; heterogeneous abilities; public factors; taxation; technical progress. (search for similar items in EconPapers)
JEL-codes: H2 H23 H24 H4 H41 H5 H52 H54 I22 I24 I25 O11 O33 O38 O41 O43 (search for similar items in EconPapers)
Date: 1994, Revised 1994
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/59951/1/MPRA_paper_59951.pdf original version (application/pdf)

Related works:
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:pra:mprapa:59951

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().