Government for the People: On the Determinants of the Size of U.S. Government

33 Pages Posted: 27 Dec 2007

See all articles by Fernando M. Goncalves

Fernando M. Goncalves

International Monetary Fund (IMF)

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Date Written: December 2007

Abstract

Trends in the size of U.S. government are examined. In the postwar period, general government primary spending rose by ¼ percent of GDP a year through 1975, stabilizing thereafter. With higher social transfers offset by a lower burden of defense spending, expansion reflected a baby-boom driven rise in education spending. The parallel improvement in tax efficiency helped equate the benefits of higher spending with the costs from higher taxation, in accordance with a marginalist view of the size of government. Looking forward, the retirement of baby boomers appears likely to expand government and lead to a more efficient tax system.

Keywords: Working Paper, United States

Suggested Citation

Goncalves, Fernando M. and Bayoumi, Tamim, Government for the People: On the Determinants of the Size of U.S. Government (December 2007). IMF Working Papers, Vol. , pp. 1-31, 2007. Available at SSRN: https://ssrn.com/abstract=1078794

Fernando M. Goncalves (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Tamim Bayoumi

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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