Fiscal Policy, State Building and Economic Development

Whether State Fiscal Policy Affects State Economic Growth

Theory predicts that fiscal policy can affect economic growth by adjusting incentives for investment and labor as well as by distorting after-tax returns across sectors. This paper examines the effect of fiscal policy on growth rates first graphically, and then through two models, one of which disaggregates fiscal policy variables. I find evidence that increased size of government is negatively...

Fiscal Policy and Economic Growth in Kenya

The question of whether or not fiscal policy stimulates growth has dominated theoretical and empirical debate for a long time. One viewpoint believes that government involvement in economic activity is vital for growth, but an opposing view holds that government operations are inherently bureaucratic and inefficient and therefore stifles rather than promotes growth. In the empirical literature,...

Fiscal Policy, Economic Integration and Unemployment

In this paper fiscal policy is examined for an open economy characterised by unemployment due to efficiency wages. We allow for capital and firm mobility in a model where the government chooses the level of wage, source-based capital and profit taxation. The taxing choices of governments are analyzed in scenarios which differ with respect to the constraints imposed on the set of available taxes...

Generational conflict, fiscal policy, and economic growth

Worldwide, dependency ratios are forecast to increase dramatically in the next 50 years. A great deal of attention has been devoted to understanding the changes in fiscal policies that ‘‘must’’ take place to accommodate these changes and maintain desirable rates of economic growth. In contrast, less effort has been concentrated on studying the fiscal shifts that will endogenously result from de...

Monetary Policy, Fiscal Policy, and Aggregate Economic Activity in Korea