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Fiscal Policy and Growth Revisited: An Application to the Case of the Spanish Regions

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  • Bajo-Rubio, Oscar
  • Diaz-Roldan, Carmen
  • Montavez-Garces, M. Dolores

Abstract

This paper presents an assessment of the effects of fiscal policy on economic growth. Starting from a theoretical model in which only those fiscal policy instruments presumed to strictly influence the production process (i. e., public capital and transfers) are incorporated into the production function, we provide an empirical application for the case of the Spanish regions during the period 1967-1991. The results confirm the positive effect of public investment on growth, together with a positive effect of transfers but only for poorer regions.
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Suggested Citation

  • Bajo-Rubio, Oscar & Diaz-Roldan, Carmen & Montavez-Garces, M. Dolores, 1999. "Fiscal Policy and Growth Revisited: An Application to the Case of the Spanish Regions," ERSA conference papers ersa99pa141, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa99pa141
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    References listed on IDEAS

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    1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, pages 465-490.
    2. Sala-i-Martin, Xavier X, 1996. "The Classical Approach to Convergence Analysis," Economic Journal, Royal Economic Society, vol. 106(437), pages 1019-1036, July.
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    6. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, pages 177-200.
    7. Sala-i-Martin, Xavier X, 1996. "A Positive Theory of Social Security," Journal of Economic Growth, Springer, vol. 1(2), pages 277-304, June.
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    9. Levine, Ross & Zervos, Sara J, 1993. "What We Have Learned about Policy and Growth from Cross-Country Regressions?," American Economic Review, American Economic Association, pages 426-430.
    10. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, pages 600-621.
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    19. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, pages 600-621.
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    21. Matilde Mas & Joaquin Maudos & Francisco Perez & Ezequiel Uriel, 1996. "Infrastructures and Productivity in the Spanish Regions," Regional Studies, Taylor & Francis Journals, pages 641-649.
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    Cited by:

    1. Oscar Bajo-Rubio & Carmen Diaz-Roldan & M. Dolores Montavez-Garces, 2001. "Optimal endowments of public investment: an empirical analysis for the spanish regions," ERSA conference papers ersa01p173, European Regional Science Association.
    2. Oscar Bajo-Rubio & Carmen Diaz-Roldan, 2005. "Optimal endowments of public capital: An empirical analysis for the Spanish regions," Regional Studies, Taylor & Francis Journals, pages 297-304.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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