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Title Endogenous growth in a model of dynamic scoring with public capital
Author Egge, Erica
Department Department of Economics and Business
Institution Colorado College
Degree Type bachelor
Degree Name Bachelor of Arts
Type of Resource text
Digital Origin reformatted digital
Date Accepted 2007
Date Digitized 2009
Abstract This paper examines the long-term effects of tax cuts on tax revenue in a model that allows for transitional dynamics. Whereas previous dynamic scoring models have assumed an exogenous, or given, growth rate, this paper changes the production function by altering the basic neoclassical Ramsey model in order to obtain endogenous growth. The transitional dynamics come from the inclusion of private and public capital as stock variables, rather than flow. The model in this paper is designed to find the revenue feedback effects from reductions in the capital tax rate. The study uses this model to explore the possibility of "feasible tax cuts": those which would generate sufficient revenue feedbacks from increased economic growth to compensate for the initial revenue loss. These are measured as having feedback effects equal to the present value of future exogenous government expenditure. This study finds that a range of feasible capital tax cuts is able to exist in an economy with an optimal fiscal environment.
Keywords Endogenous growth
Dynamic scoring
Tax revenue
Rights Statement Copyright restrictions apply. Contact the author for permission to publish.
Extent 54 p. : ill. ; 29 cm.
Note (thesis) Senior Thesis - Colorado College
Note (bibliography) Bibliography : p. 52-54
Publisher Colorado College
Place of Publication Colorado Springs, Colorado
Language eng
OCLC Identifier 162107483
Handle http://hdl.handle.net/10176/coccc:2957
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