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Fiscal Spending and Economic Growth: Some Stylized Facts

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  • Céline CARRERE

    (Université de Genève)

  • Jaime de MELO

    ()
    (Ferdi)

Abstract

Using an “event analysis”, this paper complements the cross-country approach to the study of fiscal correlates of growth. Data on fiscal expenditures and growth for a database of 140 countries (118 developing countries) over 1972-2005 are reorganized around turning points providing a summary but encompassing description of “what is in the data”. For this sample, the probability of occurrence of a fiscal event is about 10%, and, the probability of a growth event once a fiscal event had occurred is around 26 %. For developing countries, fiscal events followed by growth events occur under situations of (i) significantly lesser deficit, (ii) fewer resources devoted to non-interest General Public Services and (iii) shift in primary expenditures towards Transport & Communication.

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Paper provided by FERDI in its series Working Papers with number P35.

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Date of creation: Jan 2012
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Handle: RePEc:fdi:wpaper:506

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Cited by:
  1. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute for the Study of Labor (IZA).

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