Three Theoretical Achievements

One of the main issues of economic theory has always been the role and the impact of the government budget and fiscal policies on both individual decisions of families and businesses (microeconomic effects) and on the overall state of the economic system (macroeconomic effects). The first topic we’ll address concerns the results obtained through economic theory regarding the relations between size, composition of the government budget, and development of an economic system. To be complete, we’ll analyze the problem first from the standpoint of neoclassical theory, and then in the context of endogenous growth models