Abstract
Effectiveness of government expenditures in a growth framework. This paper resolves government expenditures into three components: expenditures on consumption goods, private capital, and public capital, and determines their longerrun impact. It is indicated that when the Phillips curve is steep but not vertical and the goals are high employment and output, government expenditures on private capital would be the most effective. If the goals are a high level of output and little inflation the most effective policy would be government expenditures on public capital, while if the goal were to reduce inflation but with a minimum reduction in output the preferred measure would be government consumption expenditures.
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