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Title:Growth and welfare maximization in models of public finance and endogenous growth PDF Logo
Authors:Misch, Florian
Gemmell, Norman
Kneller, Richard
Issue Date:2011
Series/Report no.:ZEW Discussion Papers 11-041
Abstract:This paper evaluates the trade-off between growth and welfare maximization from two perspectives. Firstly, it synthesizes and extends endogenous growth models with public finance to compare growth and welfare maximizing tax rates. Secondly, it examines the distinct model outcomes in terms of their growth rates and welfare levels. This comparison highlights the range of trade-offs: the growth maximizing tax rate can be above, below, or equal to the welfare maximizing equivalent. We find however that even relatively large differences in growth and welfare maximizing tax rates translate into relatively small differences in growth rates, and, in some cases, welfare levels.
Subjects:Economic Growth
Productive Public Spending
Optimal Fiscal Policy
JEL:E62
H21
H50
O40
Persistent Identifier of the first edition:urn:nbn:de:bsz:180-madoc-31910
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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