Discussion Paper

No. 2015-35 | May 08, 2015
Taxation and Fiscal Expenditure in a Growth Model with Endogenous Fertility


Most growth theorists agree that understanding the economics of innovation and technological change is central to understanding why some countries are richer and/or grow faster than other countries. The driving force behind recent developments in endogenous innovation models of growth is a desire to eliminate population scale effects. In the semi endogenous growth model growth becomes proportional to the exogenous population growth rate but invariant to policy. This paper makes population growth endogenous by modeling fertility along the lines of Barro and Becker (Fertility Choice in a Model of Economic Growth, 1989) and models an array of government policies to demonstrate how some policies can impact levels and growth rates in a scale free endogenous growth model. In the model government policies are categorized according to whether they have level effects only, level and growth effects, or no impact on levels and/or growth.

JEL Classification:

H2, H0, O3


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Cite As

Norman Sedgley and Bruce Elmslie (2015). Taxation and Fiscal Expenditure in a Growth Model with Endogenous Fertility. Economics Discussion Papers, No 2015-35, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2015-35

Comments and Questions

Anonymous - Referee Report 1
June 26, 2015 - 09:57

see attached file

Anonymous - Referee Report 2
June 29, 2015 - 09:55

see attached file