Fiscal Structures and Economic Growth: International Evidence
AbstractA large and growing literature searches for the determinants of economic growth, using cross-country regressions. Within this literature, one branch considers the effect of various fiscal policy variables on the growth process. Our paper continues this research effort by systematically examining the effects, if any, of fiscal structure on economic growth. We impose the government budget constraint on the regression equations so that the precise change in fiscal policy can be identified (e.g., the effect of a corporate income tax financed increase in health expenditure). In addition, our analysis employs a pooled cross-section, time-series sample that allows us to use the fixed- and random-effect model methodology. We find that debt-financed increases in government expenditure retard economic growth while tax-financed increases lead to higher or lower growth depending on the expenditure category.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 9309001.
Date of creation: 17 Sep 1993
Date of revision: 23 Sep 1993
Note: The paper is in four parts: title, text, references and tables. All have been place in the zip file wgrow.zip. The paper itself is a WordPerfect 5.0 document utilizing Bitstream fonts.
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Other versions of this item:
- Miller, Stephen M & Russek, Frank S, 1997. "Fiscal Structures and Economic Growth: International Evidence," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 603-13, July.
- E - Macroeconomics and Monetary Economics
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