Economic growth and budgetary components: a panel assessment for the EU

Arbeitspapier

In this paper we test whether a reallocation of government budget items can enhance long-term GDP growth in a set of European countries. We apply modern panel data techniques to the period 1970-2006, and we use three alternative dependent variables in a growth regression: economic growth, total factor productivity and labour productivity. Our results are able to identify also the distortions induced by public expenditure in the private factors allocation. In particular, we detect a strong crowding-in effect associated to public investment, which have enhanced economic growth by boosting private investment. We also associate a significant dependence of productivity on public expenditure on education as well as the role of social security and health issues in growth and the labour market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 848

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Fiscal Policy ; National Government Expenditures and Related Policies: General ; Economic Growth and Aggregate Productivity: General
• Subject: Economic Growth ; fiscal policy ; panel models ; Wirtschaftswachstum ; Endogenes Wachstumsmodell ; Finanzpolitik ; Öffentliche Ausgaben ; Öffentliche Einnahmen ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Afonso, António ; González Alegre, Juan
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/153282
• Last update: 10.03.2025, 11:41 AM CET