Fiscal Policy, Economic Growth and Innovation: An Empirical Analysis of G20 Countries

Horst Hanusch, Lekha Chakraborty and Swati Khurana

Economics Working Paper Archive from Levy Economics Institute

Abstract: This paper analyzes the effectiveness of public expenditures on economic growth within the analytical framework of comprehensive Neo-Schumpeterian economics. Using a fixed-effects model for G20 countries, the paper investigates the links between the specific categories of public expenditures and economic growth, captured in human capital formation, defense, infrastructure development, and technological innovation. The results reveal that the impact of innovation-related spending on economic growth is much higher than that of the other macro variables. Data for the study was drawn from the International Monetary Fund's Government Finance Statistics database, infrastructure reports for the G20 countries, and the World Development Indicators issued by the World Bank.

Keywords: Fiscal Policy; Public Expenditure; Defense; Innovation; Growth; Neo-Schumpeterian Economics (search for similar items in EconPapers)
JEL-codes: H5 O30 O38 (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-fdg and nep-ino
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Citations: View citations in EconPapers (4)

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