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Abstract:
this article looks for an efficient fiscal policy leading to the optimal growth path in developing countries where human capital accumulation is an engine of economic growth. We find that there exist a threshold where fiscal policy becomes detrimental for economic development and as long as it is not attained, fiscal policy is powerful to enhance economic growth otherwise, knowledge increase policy through optimal fiscal policy blocks the development prospects. Indeed, the study's results join those found in the literature of the relationship between growth and fiscal policy where they move in the opposite direction after the threshold crossed. Consequently, the study highlights fiscal policy limitations in development economics target.
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