Previous studies assert that the optimal share of public spending is equal to the output elasticity of public spending and that relying on capital income taxation to finance public spending is either beneficial or harmful to capital accumulation and economic growth. The authors incorporate...

A simple endogenous growth model is developed in a framework where informational imperfections in financial markets give rise to adverse selection as well as costly state verification problems and the government needs to intervene financial markets to monetize its deficits. In the model, adverse...

This paper examines optimal policies on taxation and user fees in a model where government spending is productive, rival, and congestive, and can be further classified as excludable and nonexcludable public inputs. We propose functions for the services of excludable and nonexcludable public...