Please use this identifier to cite or link to this item:
http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18056| Title: | The politics of endogenous growth |
| Keywords: | P16 O40 E62 ddc:330 Public Investment Positive Political Economy Median Voter Theorem Endogenous Growth Neue Wachstumstheorie Finanzpolitik Öffentliche Investition Wachstumspolitik Median Voter Pareto-Optimum Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Deutsches Institut für Wirtschaftsforschung (DIW) Berlin |
| Description: | Is it politically feasible for governments to engineer endogenous growth? This paper illustrates two reasonable political decision mechanisms by which fiscal policy generates endogenous growth with a single accumulable factor, under a constant returns to scale production technology, and without production externalities. In the first mechanism, optimal policies are chosen by the government to maximize constituent support by raising aggregate income. In the second mechanism, optimal policies are determined in a voting equilibrium where agents are concerned only with their own incomes. We demonstrate that policies that target aggregates generate balanced growth and are Pareto optimal. Policies chosen by the median voter also produce balanced growth, but result in public investment 50% below the socially optimal level. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18056 |
| Other Identifiers: | http://hdl.handle.net/10419/18056 ppn:367448025 |
| Appears in Collections: | EconStor |
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.