PUBLIC-POLICY AND ECONOMIC-GROWTH - JAPAN AND THE UNITED-STATES

In this paper we incorporate a public sector into a simple, constant r eturns model of economic growth developed by Barro (1990) and Jones an d Manuelli (1990). There are interesting implications regarding the re lations between the size of government, the productivity of the public sector, the saving behavior, the social security system, and the rate of economic growth. We investigate policy implications of the analyti cal results in terms of Japanese and U.S. economic growth data.