1. John R. Hicks, Value and Capital, 2nd ed. (New York: Oxford University Press, 1946), p. 64.
2. For a formal derivation of the model, see Victor A. Canto, Douglas H. Joines, and Arthur B. Laffer, “Taxation, GNP, and Potential GNP,” Proceedings of the Business and Economic Statistics Section: 1978 (Washington, D.C.: American Statistical Association, 1978).
3. Again, it is important to remember that in the framework used up to this point, all spending is in the form of lump-sum transfers that do not, in and of themselves, enhance output.
4. Donald Fullerton, “On the Possibility of an Inverse Relationship between Tax Rates and Government Revenues.” Working Paper No. 467, National Bureau of Economic Research, New York, April 1980.
5. Ibid., p. 20.