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Productive Government Expenditure and Economic Growth

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Author Info
Andreas Irmen () (University of Heidelberg, Department of Economics)
Johanna Kühnel () (University of Heidelberg, Department of Economics)

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Abstract

We provide a comprehensive survey of the recent literature on the link between productive government expenditure and economic growth. Starting with the seminal paper of Robert Barro (1990) we show that an understanding of the core results of the ensuing contributions can be gained from the study of their respective Euler equations. We argue that the existing literature incorporates many relevant aspects, however, policy recommen- dations tend to hinge on several knife-edge assumptions. Therefore, future research ought to focus more on idea-based endogenous growth models to check the robustness of policy recommendations. Moreover, the inclusion of hitherto unexplored types of government expenditure, e. g., on the "rule of law", would be desirable.

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Publisher Info
Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0464.

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Length: 48 pages
Date of creation: May 2008
Date of revision: May 2008
Handle: RePEc:awi:wpaper:0464

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Related research
Keywords: Economic Growth; Government Expenditure; Public Goods; Fiscal Policy;

Other versions of this item:

Find related papers by JEL classification:
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
H10 - Public Economics - - Structure and Scope of Government - - - General
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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Full references

Cited by:
(explanations, 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.)

  1. Torrisi, Gianpiero, 2009. "A multilevel analysis on the economic impact of public infrastructure and corruption on Italian regions," MPRA Paper 15487, University Library of Munich, Germany. [Downloadable!]
  2. Chu, Angus C. & Lai, Ching-Chong, 2009. "On the Growth and Welfare Effects of Defense R&D," MPRA Paper 16325, University Library of Munich, Germany. [Downloadable!]
  3. Kühn, Stefan & Muysken, Joan & Veen, Tom van, 2009. "The Adverse Effects of Government Spending on Private Consumption in New Keynesian Models," Research Memoranda 004, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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