This paper investigates the impact of government expenditure on growth, in a heterogeneous panel, for a sample of developing countries. Using generalized method of moments techniques, we show that countries with substantial government current expenditure have strong growth effects, which vary...

The paper investigates how changes in fiscal policy can affect relative prices, composition of private consumption, growth and welfare in a two-country, overlapping generations model of endogenous growth. We develop a simple framework that combines Blanchard-type consumers with uncertain...

We introduce public capital and public services as inputs in an endogenous growth model. We show that the growth rate depends on the apportionment of tax revenues between the accumulation of public capital and the provision of public services. When public spending is financed by proportional...

Within the Barro (1990) model of productive public services, but with the inclusion of public debt, we derive and characterize on the balanced growth path, a set of welfare maximizing fiscal rules under two budgetary regimes - one with only the standard dynamic government budget constraint, and...