Government spending composition, aggregate demand, growth and distribution

Arbeitspapier

We study a demand-driven growth and distribution model with a public sector, both without and with government debt. Government spending is used to finance the accumulation of public capital and to pay wages to public employees. The interaction between public capital and induced technical change makes long-run growth: (i) hump-shaped in the composition of government spending, (ii) wage-led, and (iii) government spending-led. Provided that the interest rate on government bonds is kept sufficiently below the growth rate, the size of government debt is irrelevant for long-run growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IMK Working Paper ; No. 158

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Aggregate Factor Income Distribution ; Fiscal Policy ; National Government Expenditures and Related Policies: General
• Subject: Keynesian growth ; Government spending composition ; Factor shares ; Fiscal policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tavani, Daniele ; Zamparelli, Luca
• Event: Veröffentlichung
• (who): Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
• (where): Düsseldorf
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/142717
• URN: urn:nbn:de:101:1-201602195056
• Last update: 10.03.2025, 11:45 AM CET