THE INFLUENCE OF DIFFERENT FORMS OF GOVERNMENT SPENDING ON DISTRIBUTION AND GROWTH

This paper deals with the influence of different types of government expenditure on growth in a post-Keynesian framework. The analysis considers a government sector with a balanced budget and an autonomous and non-linear investment function, interpreted along a Kaleckian and a Classical-Harrodian line. It shows under which conditions different types of government expenditure are beneficial or detrimental for economic growth, comparing some results with those reached by Barro in his 1990 Journal of Political Economy article, and points out the emergence of phenomena like multiple equilibria, hysteresis and low growth traps.