Huffman, Gregory W. - Vanderbilt University Department of Economics - 2001
In this paper, a modification is made to the endogenous growth model studied by Lucas [1988]. It is shown that if … equilibrium growth rate. Consumption taxation may increase the growth rate. If there is an externality in production of human … capital, then it may be optimal to impose a capital tax, as opposed to a subsidy, to achieve the optimal growth rate. This may …