This paper extends the Barro (1990) endogenous growth model with productive government services to a two-country world … government spending on infrastructure for the home country result in higher growth rates and a terms of trade improvement. Both … properties-can be obtained here even with lump-sum taxes. We also examine the welfare implications of public investment policies …

growth. However, local government investment (capital outlay) and the percent of spending devoted to highways both had a … relationship between spending by those local governments and long-run economic growth. Using a comprehensive data set of all U … statistically significant positive relationship with growth …