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Public Expenditure and National Income: Time Series Evidence from Greece


  • Michael G. Arghyrou

    (Brunel University,London, Department of Economics)


The paper investigates the existence and nature of long run relationships between Greek national income and four categories of public expenditure.Our results suggest that there exists a positive long-run relationship between GDP on the one hand; and public expenditure and "productive" public consumption on the other, with causality running both ways. There appears to be no long-run relationship between GDP ans public-sector personnel expenditure; and GDP and public-debt service expenditure.From that point of view, it would appear that in terms of output growth, the fiscal policy followed by Greece during the 1975-1990 period has rather been ineffective.

Suggested Citation

  • Michael G. Arghyrou, 2000. "Public Expenditure and National Income: Time Series Evidence from Greece," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 4(2), pages 173-191, Winter.
  • Handle: RePEc:ekn:ekonom:v:4:y:2000:i:2:p:173-191

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    References listed on IDEAS

    1. Marta Aloi Huw Dixon & Phillip Lawler, "undated". "The Multiplier in an Economy with Monopolistic Output Markets and Competitive Labour Markets," Discussion Papers 96/29, Department of Economics, University of York.
    2. Heijdra, Ben J, 1998. "Fiscal Policy Multipliers: The Role of Monopolistic Competition, Scale Economies, and Intertemporal Substitution in Labour Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 659-696, August.
    3. Dixon, Huw, 1987. "A Simple Model of Imperfect Competition with Walrasian Features," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 134-160, March.
    4. Obstfeld, Maurice & Rogoff, Kenneth, 1995. "Exchange Rate Dynamics Redux," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 624-660, June.
    5. Richard Startz, 1989. "Monopolistic Competition as a Foundation for Keynesian Macroeconomic Models," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 737-752.
    6. Mankiw, N. Gregory, 1988. "Imperfect competition and the Keynesian cross," Economics Letters, Elsevier, vol. 26(1), pages 7-13.
    7. Jordi Gali, 1995. "Non-Walrasian Unemployment Fluctuations," NBER Working Papers 5337, National Bureau of Economic Research, Inc.
    8. Julio J. Rotemberg & Michael Woodford, 1993. "Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets," NBER Working Papers 4502, National Bureau of Economic Research, Inc.
    9. Gali, Jordi, 1996. "Unemployment in dynamic general equilibrium economies," European Economic Review, Elsevier, vol. 40(3-5), pages 839-845, April.
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    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook


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