This paper analyzes the dynamic impact of tax cuts within a stochastic model of endogenous growth with a congested public input. A decreasing taxation of deterministic income parts leads to the well-known positive growth effect. Nevertheless, due to the insurance effect associated with the...

This paper analyzes the growth impact of fiscal and institutional policies for alternative sizes of regions. The local government provides a public input that may be subject to relative congestion thus reducing its individual availability. Then private capital productivity is affected by the...

This paper employs a dynamic framework to compare the effects of alternative government policies on convergence of industrialized economies to the technology frontier. The government's instruments include facilitating private investment and education policy. The latter enhances skills of...