A two-class fiscal and monetary growth model
نویسنده
چکیده
This paper extends the two-class monetary growth model by incorporating fiscal activity along the lines of Pasinetti (Cambridge J. Econ. 13, 25–36). Despite this extension, the Cambridge equation is found to be one of long-run equilibria. It is shown that Fiscal policy decreases the accumulation of capital, through an increase in the proportional tax on profits. An inflationary monetary policy has ambiguous effects, it can have positive, negative or no effect on the accumulation of capital and on the rate of profit. © 2000 Elsevier Science B.V. All rights reserved. JEL classification: E12; E62; O41
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