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In this paper, we analyze the development of public consumption expenditure in Austria starting in the 1940s. We focus … our attention on two hypotheses as to why public consumption expenditure has been constantly increasing: Wagner's law and … Baumol's cost disease. The estimated income elasticity of demand for public consumption expenditure of 0.85 suggests that …
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In recent decades, governments have built up substantial public debt, which is often accompanied by a growing public sector and fiscal policies that neglect long-term considerations. The contributors to this CESifo volume consider whether the development of public debt in the United States and...
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