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Interdependence of Government Expenditure among European Countries: Productivity Spillover and Strategic Interaction

Author

Listed:
  • Chen, Xiaodong

    (Jinhe Center for Economic Research, Xi’an Jiaotong University, China)

  • Mi, Haoming

    (Jinhe Center for Economic Research, Xi’an Jiaotong University, China)

  • Zhou, Peng

    (Cardiff Business School, Cardiff University)

Abstract

An endogenous-growth model separating productive and welfare outlays is embedded in a spatial panel for 30 EU countries (1995–2021). Productive spending yields positive domestic and cross-country growth effects; welfare expenditure shows strategic interaction, leading to under-investment in growth-enhancing programmes.

Suggested Citation

  • Chen, Xiaodong & Mi, Haoming & Zhou, Peng, 2025. "Interdependence of Government Expenditure among European Countries: Productivity Spillover and Strategic Interaction," Cardiff Economics Working Papers E2025/15, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2025/15
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    Keywords

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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