This paper will create a dynamic economic model where the objective for the government is to maximize economic growth with respect to the available capital in the economy. The amount of capital in the economy is determined by the capitalists in the model which represent the micro foundation in...

Government usually tends to have two options. They can either pursue a tax revenue maximizing strategy or a growth maximizing strategy. The two approached do not necessarily go hand in hand. This paper derives and empirically estimates a simple laissez faire optimal taxation model from the...

In economics the relationship between economic growth, debt, taxation and spending is an important one. In this paper we will use an optimal control model to analyze such relationship further. We find that lowering the tax rate is the only strategy that will increase growth and on the same time...