Growth effects of fiscal policies: an application of robust modified M-estimator
AbstractIn the field of economics only nonhigh-quality data is usually available, which can cause the widely used least square estimators (LSE) to be biased and inefficient. Therefore, the present study introduces the robust modified M-estimator (MME) proposed by Yohai et al. (1991). In the case of growth regressions with fiscal variables it can be shown that LSE is biased and inefficient, whereas MME is not. The robust regressions ascertain a stable positive growth effect of public infrastructure and education. Moreover, this study shows that government size has not been detrimental to growth for OECD countries in the past. No growth effects of taxation have been found so that endogenous growth theory is not corroborated in this regard. Consequently, fiscal policies aiming at promoting growth should focus on infrastructure and education.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 41 (2009)
Issue (Month): 7 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fölster, Stefan & Henrekson, Magnus, 2000.
"Growth Effects of Government Expenditure and Taxation in Rich Countries,"
Working Paper Series in Economics and Finance
391, Stockholm School of Economics.
- Folster, Stefan & Henrekson, Magnus, 2001. "Growth effects of government expenditure and taxation in rich countries," European Economic Review, Elsevier, vol. 45(8), pages 1501-1520, August.
- Fölster, Stefan & Henrekson, Magnus, 1998. "Growth Effects of Government Expenditure and Taxation in Rich Countries," Working Paper Series 503, Research Institute of Industrial Economics, revised 20 Jun 2000.
- Agell, Jonas & Ohlsson, Henry & Thoursie, Peter Skogman, 2006.
"Growth effects of government expenditure and taxation in rich countries: A comment,"
European Economic Review,
Elsevier, vol. 50(1), pages 211-218, January.
- Agell, Jonas & Ohlsson, Henry & Skogman Thoursie, Peter, 2003. "Growth Effects of Government Expenditure and Taxation in Rich Countries: A Comment," Research Papers in Economics 2003:14, Stockholm University, Department of Economics.
- Xavier X. Sala-i-Martin, 1997.
"I Just Ran Four Million Regressions,"
NBER Working Papers
6252, National Bureau of Economic Research, Inc.
- Temple, Jonathan, 2000. "Growth Regressions and What the Textbooks Don't Tell You," Bulletin of Economic Research, Wiley Blackwell, vol. 52(3), pages 181-205, July.
- Barro, Robert J. & Sala-i-Martin, Xavier, 1992.
"Public Finance in Models of Economic Growth,"
CEPR Discussion Papers
630, C.E.P.R. Discussion Papers.
- Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
- Kneller, Richard & Bleaney, Michael F. & Gemmell, Norman, 1999. "Fiscal policy and growth: evidence from OECD countries," Journal of Public Economics, Elsevier, vol. 74(2), pages 171-190, November.
- Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
- Zaman, Asad & Rousseeuw, Peter J. & Orhan, Mehmet, 2001.
"Econometric applications of high-breakdown robust regression techniques,"
Elsevier, vol. 71(1), pages 1-8, April.
- Zaman, Asad & Rousseeuw, Peter J. & Orhan, Mehmet, 2000. "Econometric applications of high-breakdown robust regression techniques," MPRA Paper 41529, University Library of Munich, Germany.
- Michael Bleaney & Norman Gemmell & Richard Kneller, 2001. "Testing the endogenous growth model: public expenditure, taxation, and growth over the long run," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 36-57, February.
- Howard Pack, 1994. "Endogenous Growth Theory: Intellectual Appeal and Empirical Shortcomings," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 55-72, Winter.
- Carsten Colombier & Michael Pickhardt, 2005. "A Note on Public Input Specifications," International Advances in Economic Research, Springer, vol. 11(1), pages 13-18, March.
- Andrea Bassanini & Stefano Scarpetta & Philip Hemmings, 2001. "Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries," OECD Economics Department Working Papers 283, OECD Publishing.
- anwar, saba & munir, kashif, 2013. "Size of the Government, Quality of Institutions and Growth in SAARC Countries," MPRA Paper 49524, University Library of Munich, Germany.
- Bergh, Andreas & Henrekson, Magnus, 2011.
"Government Size and Growth: A Survey and Interpretation of the Evidence,"
Working Paper Series
858, Research Institute of Industrial Economics.
- Andreas Bergh & Magnus Henrekson, 2011. "Government Size And Growth: A Survey And Interpretation Of The Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 25(5), pages 872-897, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.