This paper constructs an endogenous growth model, applicable largely to developing countries, based on human capital accumulation in which education is publicly provided and financed, and schooling is compulsory. Public investment in human and physical capital are financed from taxes on wage and...

Recent evidence on the impact of fiscal policy – taxes, public expenditures and budget deficits – on long-run growth in OECD countries has adopted the Barro (1990) framework to distinguish between ‘productive' and ‘unproductive' expenditures, and ‘distortionary' and...

The objective of the paper is to explore the saving and consumption responses of a representative household to a range of policy interventions such as changes in taxes and pension settings. To achieve this, it develops a two-period life-cycle model. The representative household maximises...

Abstract Theoretical developments, improved methodologies and more extensive data have helped generate a dramatic increase in the literature testing for the impact of government size and fiscal policy on economic growth in recent years. We review a range of the more recent evidence and examine...

Recent aggregate tests of the impact of taxes on long-run growth rates in the OECD countries remain vulnerable to two important criticisms. First, they typically use 'an aggregate average rate, or constructed marginal rate, that probably does not affect the rate that any particular economic...

This paper assesses recent theorising and empirical evidence on the impact of fiscal policy—taxes, public expenditures and budget deficits—on long-run growth. It considers the relevance of recent advances in growth theory for low-income countries and compares the evidence for low-income...