Welfare expenditure is characterized by rigidity,i.e.,it goes up easily but is very hard to get down.We introduced welfare rigidity into an endogenous growth model that includes government expenditure to analyze the i...Welfare expenditure is characterized by rigidity,i.e.,it goes up easily but is very hard to get down.We introduced welfare rigidity into an endogenous growth model that includes government expenditure to analyze the impact of welfare rigidity and the composition of public expenditure on economic growth and family utility.Our findings show that welfare spending and economic growth have a non-monotonic relationship that is negative or inverted U-shaped depending on cross-country differences.Higher welfare rigidity reduces long-term economic growth and household utility.According to the estimated optimal size of welfare expenditure,China,as a developing country with a large population,has to do all it can to improve people’s livelihood but must at the same time weigh its limited resources so that its welfare expenditure does not fall into a“welfare trap.”展开更多
This paper employs a stochastic endogenous growth model with productive government expenditure in a small open economy to analyze the optimal fiscal policy. First, a stochastic model of a small open economy is constru...This paper employs a stochastic endogenous growth model with productive government expenditure in a small open economy to analyze the optimal fiscal policy. First, a stochastic model of a small open economy is constructed. Second, the equilibrium solutions of the representative agent＇s stochastic optimization problem are derived. Third, we obtain the equilibrium solutions of the central planner＇s stochastic optimization problem and the optimal government expenditure policy. Finally, the optimal tax policy is characterized.展开更多
文摘Welfare expenditure is characterized by rigidity,i.e.,it goes up easily but is very hard to get down.We introduced welfare rigidity into an endogenous growth model that includes government expenditure to analyze the impact of welfare rigidity and the composition of public expenditure on economic growth and family utility.Our findings show that welfare spending and economic growth have a non-monotonic relationship that is negative or inverted U-shaped depending on cross-country differences.Higher welfare rigidity reduces long-term economic growth and household utility.According to the estimated optimal size of welfare expenditure,China,as a developing country with a large population,has to do all it can to improve people’s livelihood but must at the same time weigh its limited resources so that its welfare expenditure does not fall into a“welfare trap.”
基金This research is supported by the National Natural Science Foundation of China （No. 70271069）.
文摘This paper employs a stochastic endogenous growth model with productive government expenditure in a small open economy to analyze the optimal fiscal policy. First, a stochastic model of a small open economy is constructed. Second, the equilibrium solutions of the representative agent＇s stochastic optimization problem are derived. Third, we obtain the equilibrium solutions of the central planner＇s stochastic optimization problem and the optimal government expenditure policy. Finally, the optimal tax policy is characterized.
