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Fiscal Spending and Economic Growth: Some Stylized Facts

  • Céline CARRERE

    (University of Geneva)

  • Jaime DE MELO

    ()

    (Ferdi)

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.

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File URL: http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/P35_deMelo_Carrere_web.pdf
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Paper provided by FERDI in its series Working Papers with number P35.

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Date of creation: Jan 2012
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Handle: RePEc:fdi:wpaper:507
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