IDEAS home Printed from https://ideas.repec.org/p/toh/tergaa/232.html
   My bibliography  Save this paper

An Econometric Analysis of Fiscal Policy Budget Constraints in Endogenous Growth Models

Author

Listed:
  • Yoshihiko Tsukuda
  • Tatsuyoshi Miyakoshi

Abstract

This paper provides an econometric theory for examining the predictions of the public-policy endogenous growth models of Barro (1990) and others that suggest that unlike distortionary taxation and productive expenditures, nondistortionary taxation and nonproductive expenditures have no direct effect on the rate of growth. We prove that the estimates of all other regressions can be produced using only the estimates of the regression equation originally chosen. This illustrates from a statistical point of view why we are indifferent to the choice of omitted variable. Hence, decisions regarding omitted variables must incorporate criteria from the endogenous growth models. A numerical example using Kneller et al. (1999) sheds light on how the econometric analysis works in practice, and clarifies its significance for empirical study.

Suggested Citation

  • Yoshihiko Tsukuda & Tatsuyoshi Miyakoshi, 2008. "An Econometric Analysis of Fiscal Policy Budget Constraints in Endogenous Growth Models," TERG Discussion Papers 232, Graduate School of Economics and Management, Tohoku University.
    • Handle: RePEc:toh:tergaa:232
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10097/55387
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tatsuyoshi Miyakoshi & Yoshihiko Tsukuda & Tatsuhito Kono & Makoto Koyanagi, 2010. "Economic Growth And Public Expenditure Composition: Optimal Adjustment Using The Gradient Method," The Japanese Economic Review, Japanese Economic Association, vol. 61(3), pages 320-340, September.
    2. Tatsuyoshi Miyakoshi & Tatsuhito Kono & Kota Terasawa, 2010. "Optimal Adjustment Of The Composition Of Public Expenditure In Developing Countries," Pacific Economic Review, Wiley Blackwell, vol. 15(5), pages 577-595, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:toh:tergaa:232. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tohoku University Library (email available below). General contact details of provider: https://edirc.repec.org/data/fetohjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.