Government expenditure, external and domestic public debts, and economic growth

Duc-Anh Le, Cuong Le van, Phu Nguyen-Van and Amélie Barbier-Gauchard ()

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: This paper analyzes the relationship between government expenditure, tax on returns to asset, public debt, and economic growth. Public debt is composed of two components, domestic debt and external debt. We show that an increase in the tax rate on returns to asset leads to an increase in government expenditure, consumption, and domestic debt. However, the impact of tax rate on external debt is unclear. In some situation, in particular when the productivity of capital on production is low (high) and the tax rate is lower (higher) than a threshold, the relation between external debt and the tax rate has a bell-shaped form, i.e. external debt firstly rises then decreases with the tax rate.

Keywords: Taxation; public expenditure; domestic debt; external debt; growth. (search for similar items in EconPapers)
JEL-codes: H63 O40 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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http://beta.u-strasbg.fr/WP/2015/2015-25.pdf (application/pdf)

Related works:
Journal Article: Government expenditure, external and domestic public debt, and economic growth (2019)
Working Paper: Government expenditure, external and domestic public debt, and economic growth (2019)
Working Paper: Government expenditure, external and domestic public debt, and economic growth (2019)
Working Paper: Government expenditure, external and domestic public debt, and economic growth (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2015-25

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