This paper examines the role of public finance in models of economic growth. It discusses how fiscal policy can influence long-term growth rates and utility levels. The authors analyze various growth models, including those with public services, and show that optimal tax policies depend on the characteristics of these services. For example, if public services are rival and excludable, lump-sum taxation is preferable to income taxation. However, if services are subject to congestion, income taxation may be more appropriate. The paper also explores the implications of learning-by-doing and spillovers in growth models. It shows that the private rate of return on investment may differ from the social rate of return, and that government intervention may be necessary to correct for this discrepancy. The authors also consider models with varieties of capital goods and imperfect competition, showing that the private rate of return on investment may be lower than the social rate of return due to monopoly pricing. The paper concludes that public finance plays a crucial role in economic growth models. Taxation policies should be designed to correct for distortions in the private rate of return on investment. In particular, the authors argue that income taxation may be more appropriate than lump-sum taxation for certain types of public services, especially those that are subject to congestion. The paper also highlights the importance of considering the effects of public investment on economic growth, and shows that public investment may not be as important for growth as previously thought. Finally, the authors discuss the implications of technological progress in growth models, showing that the introduction of new varieties of consumer goods can have significant effects on economic growth.This paper examines the role of public finance in models of economic growth. It discusses how fiscal policy can influence long-term growth rates and utility levels. The authors analyze various growth models, including those with public services, and show that optimal tax policies depend on the characteristics of these services. For example, if public services are rival and excludable, lump-sum taxation is preferable to income taxation. However, if services are subject to congestion, income taxation may be more appropriate. The paper also explores the implications of learning-by-doing and spillovers in growth models. It shows that the private rate of return on investment may differ from the social rate of return, and that government intervention may be necessary to correct for this discrepancy. The authors also consider models with varieties of capital goods and imperfect competition, showing that the private rate of return on investment may be lower than the social rate of return due to monopoly pricing. The paper concludes that public finance plays a crucial role in economic growth models. Taxation policies should be designed to correct for distortions in the private rate of return on investment. In particular, the authors argue that income taxation may be more appropriate than lump-sum taxation for certain types of public services, especially those that are subject to congestion. The paper also highlights the importance of considering the effects of public investment on economic growth, and shows that public investment may not be as important for growth as previously thought. Finally, the authors discuss the implications of technological progress in growth models, showing that the introduction of new varieties of consumer goods can have significant effects on economic growth.