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Quality of public finances and growth

Author

Listed:
  • Schuknecht, Ludger
  • Ebert, Werner
  • Thöne, Michael
  • Afonso, António

Abstract

In this paper we review the linkages between the quality of public finances, that is, the level and composition of public expenditure and its financing via revenue and deficits, and economic growth. We review the various channels through which public finances affect growth and its underlying determinants (institutional framework, employment, savings and investment, innovation). The paper addresses the approaches used to assess the performance and efficiency of public spending, and surveys the empirical findings on the impact of fiscal variables on sustained economic growth. JEL Classification: H50, O40

Suggested Citation

  • Schuknecht, Ludger & Ebert, Werner & Thöne, Michael & Afonso, António, 2005. "Quality of public finances and growth," Working Paper Series 438, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:2005438
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp438.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    efficiency; growth; quality of public finances;

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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