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Fiscal Spending and Economic Growth: Some Stylized Facts

Author

Listed:
  • Céline CARRERE

    (University of Geneva)

  • Jaime DE MELO

    () (Ferdi)

Abstract

Using an “event analysis”, this paper complements the cross-country approach to the study of fiscal correlates of growth. Data on fiscal expenditures and growth for a database of 140 countries (118 developing countries) over 1972-2005 are reorganized around turning points providing a summary but encompassing description of “what is in the data”. For this sample, the probability of occurrence of a fiscal event is about 10%, and, the probability of a growth event once a fiscal event had occurred is around 26 %. For developing countries, fiscal events followed by growth events occur under situations of (i) significantly lesser deficit, (ii) fewer resources devoted to non-interest General Public Services and (iii) shift in primary expenditures towards Transport & Communication.

Suggested Citation

  • Céline CARRERE & Jaime DE MELO, 2012. "Fiscal Spending and Economic Growth: Some Stylized Facts," Working Papers P35, FERDI.
  • Handle: RePEc:fdi:wpaper:507
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jungsuk Kim & Almas Heshmati, 2016. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," Working Papers id:8421, eSocialSciences.
    2. Itchoko motande Mondjeli mwa ndjokou, 2015. "Too much public expenditures, less economic growt," Economics Bulletin, AccessEcon, vol. 35(3), pages 1985-1991.
    3. repec:spr:ijsaem:v:8:y:2017:i:2:d:10.1007_s13198-017-0616-6 is not listed on IDEAS
    4. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute for the Study of Labor (IZA).
    5. Hasnul, Al Gifari, 2015. "The effects of government expenditure on economic growth: the case of Malaysia," MPRA Paper 71254, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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