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La Composición del Gasto Público y el Crecimiento Económico
[Composition of Public Spending and Economic Growth]

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  • Hernández Mota, José Luis

Abstract

In this paper the effects of government spending on economic growth are analyzed. In this sense, the aim is to examine the implications for growth by developing a simple model of capital accumulation in a sector where productive government spending takes the form of public investment in infrastructure and is endogenous, so that allow a balance subject to a transitional dynamics. To achieve this, the infrastructure is introduced as a stock of public capital in the form of an external input in the production function and assuming that agents take as given public policy when making their decisions on consumption and investment. It is further assumed that the government chooses the optimal public policy that maximizes the welfare of the representative agent taking as given the decision rules of the agent in order to characterize the evolution of public and private capital along a dynamic path.

Suggested Citation

  • Hernández Mota, José Luis, 2008. "La Composición del Gasto Público y el Crecimiento Económico [Composition of Public Spending and Economic Growth]," MPRA Paper 68941, University Library of Munich, Germany, revised Nov 2008.
    • Handle: RePEc:pra:mprapa:68941
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    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
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    3. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    4. Glomm, Gerhard & Ravikumar, B., 1994. "Public investment in infrastructure in a simple growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1173-1187, November.
    5. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    6. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    7. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    8. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Economic Growth; Public Expenditure Productive; Public Capital;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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