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The Relationship Between Government Spending And Growth: A Survey

Author

Listed:
  • Stefania Marica

    (corresponding author)

  • Romano Piras

    (Department of Social and Institutional Sciences, University of Cagliari)

Abstract

This paper discusses some empirical aspects related to the influence of public spending on economic growth. From a theoretical point of view, recent argument in favour of the relevant relationship between public expenditure and long-run economic growth impinges on the inclusion of fiscal policies into the endogenous growth models. Economic theory suggests several mechanisms through which government activity can affect growth, following linear and non-linear trends. The first part of this paper offers an empirical literature review on the relationship between the size of government and economic growth and shows how empirical findings follow a contrasting pattern. The second part focuses on the more recent strand of the empirical literature that attempts to evaluate the influence of a functional breakdown of public spending on economic growth.

Suggested Citation

  • Stefania Marica & Romano Piras, 2018. "The Relationship Between Government Spending And Growth: A Survey," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 126(2), pages 123-151.
    • Handle: RePEc:vep:journl:y:2018:v:126:i:2:p:123-151
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    Cited by:

    1. Yuan, Mingqing, 2023. "The nexus between economic growth, healthcare expenditure, and CO2 emissions in Asia-Pacific countries: Evidence from a PVAR approach," MPRA Paper 119994, University Library of Munich, Germany.

    More about this item

    Keywords

    Economic Growth; Fiscal Policy; Government Spending;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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