Paldam, Martin - School of Economics and Management, University of Aarhus - 2009
The paper considers a two-sector economy with a constant population: The public sector, with stable productivity, and a … causes the share of the real public sector to vanish. The other policy fixes the share of real public production - this … private sector, with productivity growth. Baumol’s law says that such an economy has no steady state. It is demonstrated what …