A Relook at Output-Reducing Government Expenditure

Perceived wisdom typically corroborates ‘useful’ Keynesian-type of public spending to be welfare-improving if output (or GDP) increases, i.e. a positive fiscal multiplier. I show a contrarian result which suggests that welfare can increase despite a fall in output due to fiscal expenditure. The conditions which drive this outcome are the production of differentiated products under increasing returns to scale and spare labour capacity in the economy

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Year of publication:	2014
Authors:	Kwan, Chang Yee
Publisher:	[S.l.] : SSRN

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Extent:	1 Online-Ressource (21 p)
Series:	Lee Kuan Yew School of Public Policy Research Paper ; No. 13-07
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 29, 2013 erstellt
Other identifiers:	10.2139/ssrn.2304519 [DOI]
Classification:	E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation ; H2 - Taxation, Subsidies, and Revenue ; J2 - Time Allocation; Work Behavior; Employment Determination and Creation
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10014155096