Taxes, Growth, and

ECONOMISTS have started devoting increasing attention to the problem of economic growth—in particular, to the impact of government policy, especially taxation and spending. Their findings will give us an idea of the likely effect of the kinds of policies being proposed by the Clinton Administration.

Throughout most of the postwar period, economic growth was assumed to be purely a function of the productivity of economic inputs, such as labor and capital. This is known as the neoclassical growth model; its principal developer was Professor Robert Solow of MIT, one of Clinton’s economic advisors. Much of the research on growth during this period simply involved calculating the contribution of each particular input in ever greater detail.

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Bruce Bartlett

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ECONOMISTS have started devoting increasing attention to the problem of economic growth—in particular, to the impact of government policy, especially taxation and spending. Their findings will give us an idea of the likely effect of the kinds of policies being proposed by the Clinton Administration.

Throughout most of the postwar period, economic growth was assumed to be purely a function of the productivity of economic inputs, such as labor and capital. This is known as the neoclassical growth model; its principal developer was Professor Robert Solow of MIT, one of Clinton’s economic advisors. Much of the research on growth during this period simply involved calculating the contribution of each particular input in ever greater detail.