Endogenous Growth Models and Public Fiscal Policy

Endogenous growth models posit that policy instruments, human capital accumulation and innovation processes are internal drivers of economic expansion. By incorporating fiscal variables directly into production functions, these frameworks explore how government spending, taxation and debt dynamics influence long-run growth trajectories. Key mechanisms include the productivity-enhancing role of public capital, the distortionary effects of taxation on investment and labour supply, and the intertemporal trade-offs inherent in debt-financed policies. Such models often adopt overlapping generations or continuous-time structures to capture the dynamic interaction between demographic shifts, budget deficits and price stability. Recent advances have enriched the analysis of optimal fiscal rules, the sustainability of public debt under different demographic regimes, and the global coordination of fiscal efforts in a world of shared public goods. This body of work informs debates on infrastructure investment, social spending and the long-term implications of deficit financing for inflation, employment and welfare.

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Endogenous Growth Models and Public Fiscal Policy publication trend

The graph below shows the total number of articles in endogenous growth models and public fiscal policy across all publications each year (not limited to Nature Index journals).

Technical terms

Endogenous growth model: A framework in which economic growth arises from factors internal to the model, such as human capital accumulation, innovation and policy decisions.

Budget deficit: The shortfall when government expenditures exceed revenues, typically financed through borrowing or monetary creation.

Overlapping generations model (OLG): An analytical structure that represents different age cohorts interacting over time, used to study intertemporal fiscal and demographic effects.

Public goods: Non-rivalrous, non-excludable goods provided by the state, such as infrastructure or research, which enhance productivity and welfare.

Tariff: A tax on imported goods that influences government revenue, consumption patterns and, within growth models, macroeconomic stability.

References

1. Budget deficit and money holding when consumers live forever in an endogenous growth model. Journal of Economic Analysis (2023).
2. Monetary economy and budget deficit in endogenous growth model. International Studies of Economics (2023).
3. Involuntary Unemployment and Fiscal Policy for Full-Employment. Theoretical Economics Letters (2020).
4. Fertility, fiscal deficit and sustainability of public debt in an endogenous growth model. Economics and Business Review (2023).
5. On the (de)stabilization role of protectionism. Journal of Mathematical Economics (2024).
6. Global public goods, fiscal policy coordination, and welfare in the world economy. European Economic Review (2025).