TY - JOUR
T1 - Government finance and endogenous growth
AU - Strawczynski, Michel
AU - Dahan, Momi
PY - 1996/12
Y1 - 1996/12
N2 - A crucial assumption for the solution of the endogenous growth model with government intervention is a balanced budget along the perpetual steady state. This assumption is unreal once we are interested to test the model using government data, given that in most countries the budget is not balanced. In this letter we adopt the well-known rule of 'tax smoothing' in order to make this assumption a realistic one. According to our approach the relevant variable for the implementation of a balanced budget is permanent government expenses. The empirical performance of the model is characterized using Israeli data.
AB - A crucial assumption for the solution of the endogenous growth model with government intervention is a balanced budget along the perpetual steady state. This assumption is unreal once we are interested to test the model using government data, given that in most countries the budget is not balanced. In this letter we adopt the well-known rule of 'tax smoothing' in order to make this assumption a realistic one. According to our approach the relevant variable for the implementation of a balanced budget is permanent government expenses. The empirical performance of the model is characterized using Israeli data.
UR - http://www.scopus.com/inward/record.url?scp=5744246909&partnerID=8YFLogxK
U2 - 10.1080/135048596355600
DO - 10.1080/135048596355600
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AN - SCOPUS:5744246909
SN - 1350-4851
VL - 3
SP - 789
EP - 791
JO - Applied Economics Letters
JF - Applied Economics Letters
IS - 12
ER -
