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 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.

Gastos públicos e crescimento econômico no Brasil: análise dos impactos dos gastos com custeio e investimento

“…Os resultados dos dois primeiros ensaios apontam para uma relação positiva entre crescimento económico e eficiência do Governo, enquanto que o terceiro ensaio sugere uma relação longo do tempo. Ferreira (2001) Através de planos de incentivo ao crescimento da indústria no Brasil e planos de condução do desenvolvimento do país.…”