Gong L, ZOU HENG‐FU.
Public Expenditures, Taxes, Federal Transfers, and Endogenous Growth. Journal of Public Economic Theory. 2011.
AbstractThis paper extends the
Barro (1990) model with single aggregate government spending and one flat income tax to include public expenditures and taxes by multiple levels of government. It derives the rate of endogenous growth and, with both simulations and special examples, examines how that rate changes with respect to federal income tax, local taxes, and federal transfers. It also discusses the growth and welfare‐maximizing choices of taxes and federal transfers.