IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Expenditure-Growth Nexus: Does the Source of Finance Matter? Empirical Evidence from Selected South Asian Countries

  • Muhammad Iftikhar ul Husnain

    (, Federal Urdu University of Arts, Science and Technology (FUUAST), Islamabad)

The study employs the Fixed Effect Model on a panel of four South Asian countries viz., Pakistan, India, Sri Lanka, and Nepal, for the period 1975–2008 to investigate if the source of finance matters in determining the impact of public expenditure on growth. The analysis shows that the source of finance does matter. Seigniorage-financed public expenditure has a larger negative effect on growth, followed by debt-financed and tax-financed public expenditure. Therefore, financing of public expenditure through taxes is the least costly option available with the governments in low-income countries. In general, fiscal discipline through cuts in public spending is required to boost economic growth

If 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.

File URL: http://www.pide.org.pk/pdf/PDR/2010/Volume4/631-640.pdf
Download Restriction: no

Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 49 (2010)
Issue (Month): 4 ()
Pages: 631–640

as
in new window

Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:631-640
Contact details of provider: Postal: P.O.Box 1091, Islamabad-44000
Phone: (92)(51)9248051
Fax: (92)(51)9248065
Web page: http://www.pide.org.pk
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Theodore Palivos & Chong K. Yip, 1994. "Government expenditure financing in an endogenous growth model: a comparison," Working Paper 94-1, Federal Reserve Bank of Atlanta.
  2. Rehana Siddiqui & Afia Malik, 2001. "Debt and Economic Growth in South Asia," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 677-688.
  3. Klein,Martin & Neumann,Manfred, . "Seignorage: What is it and who gets it?," Discussion Paper Serie B 124, University of Bonn, Germany.
  4. 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.
  5. Malcolm D. Knight & Delano Villanueva & Norman Loayza, 1992. "Testing the Neoclassical Theory of Economic Growth; A Panel Data Approach," IMF Working Papers 92/106, International Monetary Fund.
  6. Marco A. Espinosa & Chong K. Yip, 1995. "Fiscal and monetary policy interactions in an endogenous growth model with financial intermediaries," Working Paper 95-10, Federal Reserve Bank of Atlanta.
  7. Miguel D. Ramirez & Nader Nazmi, 2003. "Public Investment and Economic Growth in Latin America: an Empirical Test," Review of Development Economics, Wiley Blackwell, vol. 7(1), pages 115-126, February.
  8. Fischer, Stanley, 1982. "Seigniorage and the Case for a National Money," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 295-313, April.
  9. Habib Ahmed & Stephen M. Miller, 1999. "Crowding-Out and Crowding-In Effects of the Components of Government Expenditure," Working papers 1999-02, University of Connecticut, Department of Economics.
  10. Drazen, Allan, 1985. "A general measure of inflation tax revenues," Economics Letters, Elsevier, vol. 17(4), pages 327-330.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:49:y:2010:i:4:p:631-640. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Khurram Iqbal)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.