This paper examines whether the evidence from OECD countries is consistent withthe predictions of endogenous growth models that the structure of taxation and publicexpenditure can affect the steady-state growth rate. We find strong support for theBarro (1990) public policy endogenous growth...

This paper evaluates the trade-off between growth and welfare maximization from two perspectives. Firstly, it synthesizes and extends endogenous growth models with public finance to compare growth and welfare maximizing tax rates. Secondly, it examines the distinct model outcomes in terms of...

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...

Effective marginal tax rates (EMTRs) can be very different from the statutory rate and vary across firms, reflecting such factors as the extent and nature of taxable deductions (losses, depreciation), asset and ownership structures, and debt/equity financing. We estimate firm-specific EMTRs and...