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Type: Journal article
Title: The marginal cost of public funds in growing economies
Author: Hashimzade, N.
Myles, G.
Citation: Annals of economics and statistics, 2014; (113/114):11-36
Publisher: Association pour le développement de la recherché en économie et en statistique
Issue Date: 2014
ISSN: 2115-4430
Statement of
Nigar Hashimzade and Gareth D. Myles
Abstract: The marginal cost of public funds (MCF) measures the cost to the economy of raising government revenue. The MCF can be used to guide reform of the tax system and to determine an efficient level of government expenditure. It can also be used as an input into cost-benefit analysis. Previous applications of the concept have developed a methodology in a context of a static economy. We develop the methodology of the MCF to extend the concept to growing economies. The extended concept is then applied to variants of the Barro endogenous growth model with a productive public input. The MCF is used to address the choice between labour and capital taxes and to explore the implications of infrastructural spill-overs across regions.
Keywords: Growth; externalities; infrastructure; public funds
Description: Supplied as: Cost-benefit analysis and the marginal cost of public funds
Rights: © Annals of Economics and Statistics - number 113/114, June 2014
DOI: 10.15609/annaeconstat2009.113-114.11
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Appears in Collections:Aurora harvest 3
Economics publications

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