Time-Series Evidence on the Nonlinearity Hypothesis for Public Spending
Abstract
Barro-type endogenous growth models propose a nonmonotonic relationship between productive public spending and growth. Under this so-called nonlinearity hypothesis the size and direction of growth effects due to an increase in public spending depend on the share of public spending in GDP. Employing German time-series data we examine the validity of the nonlinearity hypothesis. We estimate growth effects by using models whose coefficients are allowed to vary with the share of public spending in GDP. Our results support the hypothesis for public consumption but not for public investment data. (JEL H54, E62, C22) Copyright 2003, Oxford University Press.Download Info
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Bibliographic Info
Article provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 41 (2003)
Issue (Month): 4 (October)
Pages: 565-573
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Related research
Keywords:Find related papers by JEL classification:
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2009.
"Optimal Military Spending in the US: A Time Series Analysis,"
Discussion Papers
0903, University of the West of England, Department of Economics.
- d'Agostino, G. & Dunne, J.P. & Pieroni, L., 2011. "Optimal military spending in the US: A time series analysis," Economic Modelling, Elsevier, vol. 28(3), pages 1068-1077, May.
- Rajkumar, Andrew Sunil & Swaroop, Vinaya, 2008. "Public spending and outcomes: Does governance matter?," Journal of Development Economics, Elsevier, vol. 86(1), pages 96-111, April.
- Milad Zarin-Nejadan, 2011. "Government and Growth," IRENE Working Papers 11-02, IRENE Institute of Economic Research.
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