Recent empirical evidence indicates that two inflation thresholds exist in the inflation-growth relationship. Pre-existing theoretical models, however, fail to generate such a pattern. By adding consumption loans (which are non-productive) into a standard model of imperfect information, this...

This paper examines optimal policies on taxation and user fees in a model where government spending is productive, rival, and congestive, and can be further classified as excludable and nonexcludable public inputs. We propose functions for the services of excludable and nonexcludable public...

Previous studies assert that the optimal share of public spending is equal to the output elasticity of public spending and that relying on capital income taxation to finance public spending is either beneficial or harmful to capital accumulation and economic growth. The authors incorporate...