@article{Islam:208446,
      recid = {208446},
      author = {Islam, S.M.A},
      title = {Government expenditure and theory of efficient private and  public finance},
      journal = {Journal of the Bangladesh Agricultural University},
      address = {2009},
      number = {452-2016-35790},
      pages = {5},
      year = {2009},
      abstract = {The efficient government finance will increase economic  growth and thereby income distribution. This research has  been formulated an efficiency theory of production and  finance. This research compared the government expenditure  patterns into two situations. One, when a government  borrows and accordingly allocates resources for productive  expenditures for private and public finance. Another  situation is that when a government borrows and fixed the  resources for productive expenditure for only public  finance. A comparative efficiency theory of production and  finance are being formulated to test the general  equilibrium of production of goods and services. This  general equilibrium theory of efficient production of a  firm has been made a conclusion that government resource  allocation in both for private and public finance is  efficient and never creates economic distortion even if  these resources are borrowed form domestic sources. These  domestic sources might be private commercials banks or any  other financial institutions. The government resource  allocation is not efficient when the government borrowing  is fixed only for increasing public finance. This process  implies diminishing return and thus increases public  expenditure implicitly. Increasing nonproductive government  expenditure will expand the size of the government and  accordingly reduce economic growth in the long run. But  both the private and public finance from borrowing will not  hamper the efficiency of the production of a firm and  accordingly reduce economic distortion. The tendency of  reducing economic distortion will ultimately increase  economic growth and economic welfare as well.},
      url = {http://ageconsearch.umn.edu/record/208446},
      doi = {https://doi.org/10.22004/ag.econ.208446},
}