Using data from 11 manufacturing industries in 17 OECD countries, this paper empirically investigates the determinants of cross-country differences in the persistence of productivity differentials. Specifically, the paper focuses on the effects of product market structure and technology diffusion. It is found that the manufacturing industries display a wide range of convergence rates. Consisten...

Most of the discussion about fiscal stimulus focuses on the multiplier of government spending on impact. In this paper we shift the focus to the multiplier at the end, i.e. to the period in which a deficit spending program terminates. We show that recent time series analyses as well as economic models of different schools of thought predict that the multiplier turns negative before spending exp...

We provide a model for analyzing effects of the tax system and spending programs on the determination of government spending and taxpayer welfare. An improvement in the efficiency of either taxes or spending would reduce political pressure for suppressing the growth of government and thereby increase total tax revenue and spending. We demonstrate the similarity of the political responses to rev...

In the standard New Keynesian model, monetary policy is often described by an interest rate rule (e.g. a Taylor rule) that moves the interest rate in response to deviations of inflation and some measure of economic activity from target. Nominal interest rates are bound from below by 0 – since money is storable, one would never accept a negative nominal return. How does the behavior of the NK mo...

Mankiw [12] argues that governments should equate the marginal losses of both taxation and seigniorage revenues to finance their spending. His model-the revenue smoothing hypothesisimplies that governments' tax and seigniorage revenues must move together. However, different types of political parties might be more concerned about creating seigniorage. The partisan theory argues that right-wing ...

Student achievement has been identified as an important contributor to economic growth. This paper investigates the relationship between redistributive government activities and investment in human capital measured by student performance in international comparative tests in Mathematics and Science during the period 1980 to 2003. In fixed effects panel models, government consumption, government...

This article challenges a prevailing view that diminished electoral prospect of the incumbent UPA government is the result of neglecting growth to launch populist welfare schemes. We look at a wide range of economic indicators to show that compared to the NDA regime, the UPA period has been characterised by faster growth, higher savings and investment, growing foreign trade and capital inflows,...

BACKGROUND Government health care spending (GHS) is of increasing importance to child health. Our study determined the relationship between reductions in GHS and child mortality rates in high- and low-income countries. METHODS The authors used comparative country-level data for 176 countries covering the years 1981 to 2010, obtained from the World Bank and the Institute for Health Metrics and...