Ghate, Chetan; Zak, Paul J. - 2000 - This version April 14, 2000
in 1992. To examine the dynamics of the growth and subsequent reduction in government spending, we present a dynamic … GDP - but eventually diverge from output due to the growth of the welfare state. After government expenditures become … large, we identify an endogenous threshold on the economy's growth path where it is optimal for politicians to shrink the …