This paper assesses recent theorising and empirical evidence on the impact of fiscal policy—taxes, public expenditures and budget deficits—on long-run growth. It considers the relevance of recent advances in growth theory for low-income countries and compares the evidence for low-income...

This paper evaluates the trade-off between growth and welfare maximization from two perspectives. Firstly, it synthesizes and extends endogenous growth models with public finance to compare the growth and welfare maximizing tax rates. Secondly, it examines the distinct model outcomes in terms of...

This paper develops endogenous growth models in which the government uses income taxation to finance different types of public services, public investment, or both. The paper then assesses the merits of business perceptions of alternative fiscalpolicy related growth constraints as guides for...

Endogenous growth models, such as Barro (1990), predict that governmentexpenditure and taxation will have both temporary and permanent effects on growth.We test this prediction using panels of annual and period-averaged data for OECDcountries during 1970-95, isolating long-run from short-run...