The distributional consequences of government spending

Abstract
This paper examines the effect of fiscal policy and provision of productive public goods on the dynamics of growth and inequality. A model is developed in which public infrastructure is both an engine of growth and a determinant of the distributions of wealth, income, and welfare. The design of government spending and taxation policies is a critical source of (i) the growth-inequality relationship, and (ii) the efficiency-equity trade-off, both in transition as well as the steady-state. For example, growth-enhancing government spending policies can generate sharp intertemporal trade-offs in the evolution of income inequality: inequality falls in the short run, but gradually increases over time to worsen in the long-run. The existence of an efficiency-equity trade-off depends on the taxation policy used to finance government spending. In this respect, the capital income tax serves as an effective tool of egalitarian redistribution. The redistributive effects of the consumption tax as an alternative to the more conventional labor income tax are also highlighted.
Keywords No keywords specified (fix it)
Categories (categorize this paper)
Options
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
 
Download options
PhilPapers Archive


Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 9,351
External links
  •   Try with proxy.
  • Through your library Only published papers are available at libraries
    References found in this work BETA

    No references found.

    Citations of this work BETA

    No citations found.

    Similar books and articles
    Analytics

    Monthly downloads

    Added to index

    2009-01-28

    Total downloads

    6 ( #162,810 of 1,088,374 )

    Recent downloads (6 months)

    1 ( #69,601 of 1,088,374 )

    How can I increase my downloads?

    My notes
    Sign in to use this feature


    Discussion
    Start a new thread
    Order:
    There  are no threads in this forum
    Nothing in this forum yet.