A Note on Growth, Welfare and Public Policy
ABSTRACT ln this note the growth and welfare effects of fiscal and monetary policies are investigated in four economies where public investment is part of the productive process. It is shown that growth is maximized at positive levels of income tax and inflation but that there is no direct relations...
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| Format: | Article |
| Language: | English |
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Editora 34
2021-06-01
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| Series: | Brazilian Journal of Political Economy |
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| Online Access: | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000100106&tlng=en |
| _version_ | 1798021424161488896 |
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| author | PEDRO CAVALCANTI FERREIRA |
| author_facet | PEDRO CAVALCANTI FERREIRA |
| author_sort | PEDRO CAVALCANTI FERREIRA |
| collection | DOAJ |
| description | ABSTRACT ln this note the growth and welfare effects of fiscal and monetary policies are investigated in four economies where public investment is part of the productive process. It is shown that growth is maximized at positive levels of income tax and inflation but that there is no direct relationship between government size, productivity and growth or between inflation and growth. However, unless there are no transfers, no political conflict or public goods in the economy, maximization of growth does not imply welfare maximization and the optimal tax rate and government size are greater than those that maximize growth. Money is not superneutral and the optimal rate of money creation is below the maximizing rate of growth. |
| first_indexed | 2024-04-11T17:13:39Z |
| format | Article |
| id | doaj.art-5dbf5c77947141e0996590fcc1045fe8 |
| institution | Directory Open Access Journal |
| issn | 1809-4538 |
| language | English |
| last_indexed | 2024-04-11T17:13:39Z |
| publishDate | 2021-06-01 |
| publisher | Editora 34 |
| record_format | Article |
| series | Brazilian Journal of Political Economy |
| spelling | doaj.art-5dbf5c77947141e0996590fcc1045fe82022-12-22T04:12:49ZengEditora 34Brazilian Journal of Political Economy1809-45382021-06-0121110612210.1590/0101-31572001-1231A Note on Growth, Welfare and Public PolicyPEDRO CAVALCANTI FERREIRAhttps://orcid.org/0000-0001-9560-8200ABSTRACT ln this note the growth and welfare effects of fiscal and monetary policies are investigated in four economies where public investment is part of the productive process. It is shown that growth is maximized at positive levels of income tax and inflation but that there is no direct relationship between government size, productivity and growth or between inflation and growth. However, unless there are no transfers, no political conflict or public goods in the economy, maximization of growth does not imply welfare maximization and the optimal tax rate and government size are greater than those that maximize growth. Money is not superneutral and the optimal rate of money creation is below the maximizing rate of growth.http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000100106&tlng=enPublic expenditureinvestmenteconomic growth |
| spellingShingle | PEDRO CAVALCANTI FERREIRA A Note on Growth, Welfare and Public Policy Brazilian Journal of Political Economy Public expenditure investment economic growth |
| title | A Note on Growth, Welfare and Public Policy |
| title_full | A Note on Growth, Welfare and Public Policy |
| title_fullStr | A Note on Growth, Welfare and Public Policy |
| title_full_unstemmed | A Note on Growth, Welfare and Public Policy |
| title_short | A Note on Growth, Welfare and Public Policy |
| title_sort | note on growth welfare and public policy |
| topic | Public expenditure investment economic growth |
| url | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000100106&tlng=en |
| work_keys_str_mv | AT pedrocavalcantiferreira anoteongrowthwelfareandpublicpolicy AT pedrocavalcantiferreira noteongrowthwelfareandpublicpolicy |