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Is public expenditure really productive? New evidence for the US and the Netherlands

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  • Jan Egbert Sturm
  • Jakob de Haan,

Abstract

This paper reviews empirical evidence for the United States on the impact of the public capital stock on productivity. On econometric grounds it is argued that most previous research is flawed. If the well-known model of Aschauer is estimated in first differences - which is necessary as the variables used are neither stationary nor cointegrated - the model breaks down entirely. Similar results are found for the Netherlands.

Suggested Citation

  • Jan Egbert Sturm & Jakob de Haan,, 1994. "Is public expenditure really productive? New evidence for the US and the Netherlands," Working Papers 20, Centre for Economic Research, University of Groningen and University of Twente.
  • Handle: RePEc:wop:ccsowp:0020
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