EconPapers    
Economics at your fingertips  
 

Has the Golden Rule of Public Finance Made a Difference in the UK ?

Jerome Creel, Paola Monperrus-Veroni and Francesco Saraceno ()
Additional contact information
Francesco Saraceno: Observatoire Français des Conjonctures Économiques, Postal: 69, Quai d'Orsay, Paris 75007, France

No 2007-13, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: This paper uses the SVAR methodology to investigate the effects of public investment on growth, and more specifically, the effects of the introduction of a golden rule of public finance. We extend the existing literature by estimating a model of the British economy that takes into account long run factors such as public debt accumulation. We find that in such a long run framework, public investment has a significant and permanently positive effect on GDP growth; this result runs counter to the most recent literature on the topic that was limited to a short run specification. We further find, by comparing different subsamples, that the introduction of the golden rule in 1997 strengthened the positive effect of public investment.

Keywords: fiscal policy; golden rule of public finance; Structural VAR; Public Investment; UK Economy (search for similar items in EconPapers)
JEL-codes: C32 E60 E63 H60 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.ofce.sciences-po.fr/pdf/dtravail/WP2007-13.pdf (application/pdf)

Related works:
Working Paper: Has the Golden Rule of Public Finance Made a difference in the UK (2007) Downloads
Working Paper: Has the Golden Rule of Public Finance Made a difference in the UK (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:0713

Access Statistics for this paper

More papers in Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE) Contact information at EDIRC.
Bibliographic data for series maintained by Francesco Saraceno ().

 
Page updated 2025-03-25
Handle: RePEc:fce:doctra:0713