Fiscal Deficit, National Saving and Sustainability of Economic Growth in Emerging Economies: A Dynamic GMM Panel Data Approach
AbstractThe neoclassical growth models argued that the movement to steady states; technology, exogenous rate of savings, population growth and technical progress stimulate higher growth levels (Solow, 1956). Contrary to the neoclassical argument, endogenous growth model argues that, in the theory of endogenous growth, government play a significant role in promoting accumulation of knowledge, research and development, public investment, human capital development, law and order can generate growth both in the short and long run. Moreover, they assumed technical progress as endogenous variable for growth (Barro, 1995). This study analyze the effects of fiscal deficit on sustainability of economic growth and provided new empirical evidence on the effects of fiscal deficit on saving and sustainability of economic growth based on the assumption of endogenous growth model. We estimated using the reduced form of GMM method for dynamic panels covers 1990-2009 for three emerging countries that includes China, India and South Africa.
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Bibliographic InfoArticle provided by Econjournals in its journal International Journal of Economics and Financial Issues.
Volume (Year): 2 (2012)
Issue (Month): 2 ()
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Fiscal deficit; National saving; Sustainability; Growth;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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