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The Impact of Public Expenditures on Economic Growth: A Case Study of Central and Eastern European Countries

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  • Dan Lupu
  • Mihai Bogdan Petrisor
  • Ana Bercu
  • Mihaela Tofan

Abstract

This study tests the importance of various categories of public expenditure, the functional structure, and growth in the gross domestic product (GDP), using an autoregressive-distributed lag (ARDL) model. We document and study the correlation between real GDP growth and 10 different categories of public expenditure, according to their functional classification, using quarterly data for the period 1995–2015, for 10 selected Central and Eastern European countries that joined the European Union. The results of our study, like most recent literature, show that expenditures on education and health care have a positive impact on the economy, while expenditures on defense, economic affairs, general public services, and social welfare have a negative impact.

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  • Dan Lupu & Mihai Bogdan Petrisor & Ana Bercu & Mihaela Tofan, 2018. "The Impact of Public Expenditures on Economic Growth: A Case Study of Central and Eastern European Countries," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 54(3), pages 552-570, February.
    • Handle: RePEc:mes:emfitr:v:54:y:2018:i:3:p:552-570
    DOI: 10.1080/1540496X.2017.1419127
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    4. BOSTAN, Ionel, 2018. "Book review: Tax law (By: Professor PhD Mihaela Tofan)," LawArXiv ukf97, Center for Open Science.
    5. Sedat Alataş & Erkam Sarı, 2021. "An Empirical Investigation on Regional Disparities in Public Expenditures: Province Level Evidence from Turkey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(1), pages 217-240, November.
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    10. Igor Fedotenkov & Rangan Gupta, 2021. "The effects of public expenditures on labour productivity in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(4), pages 845-874, November.
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