29/2005
November
Long Run Effects of Public Consumption Composition in a Growing Economy
 
Roberto Censolo, Caterina Colombo


We present a standard three sectors growth model both in the scale and non scale version, to analyze the long run effects of the composition of public consumption. Our main result is the following: if the composition of public consumption differs from that of the private sector, then changes in lump sum taxation affects the steady state real variables.

 
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