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...

This paper studies the effect of structural change on the historical path of aggregate labor productivity growth for a large sample of European countries, and it builds a quantitative multi-sector growth model to analyze the potential impact that structural change may have on future productivity...

The aim of this paper is to investigate the interplay between structural change, interpreted as the secular process of sectoral transformation, and labour productivity growth in the EU in several new dimensions. First, based on the latest data, we document the size of the negative effect that...

We study the effect of political polarization on public spending using the dispersion of self-reported political preferences as our measure of polarization. Political polarization is strongly associated with smaller government in democratic countries, but there is no relationship between...

We discuss and provide an overview of the size and role of the government, notably in terms of what the government "should" do, how the government could spend and intervene in the economy, how much governments spend and what they spend their money on. This is done from a historical perspective...

This paper contributes to the literature on majority voting over fiscal policies. We depart from the standard model in two dimensions. First, besides redistributing income, the government uses the net tax revenue to finance the provision of goods and services that become in-kind transfers to the...

This paper studies two formal models of long run growth with a medium-run distributive cycle, both of which feature causal links from the rise in inequality to a deterioration of long run macroeconomic performance. Both versions feature an endogenous income-capital ratio: one through the...

In 1974 Britain elected a Labour government pledged to expand public spending significantly. Labour followed its programme for two years, but after that began to cut both government spending and taxation, anticipating the post-1979 Conservative agenda. This paper examines the history of this...

Following ECB-president Draghi's remark that the European Social Model does no longer exist and the crisis can only be overcome through a combination of austerity and structural reform, this paper examines the consequences of austerity measures and structural reforms adopted during the crisis in...