The relationship between budgetary expenditure and economic growth in Poland

Henryk Gurgul, Łukasz Lach and Roland Mestel ()

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract This paper investigates the association between different kinds of budgetary expenditure and economic growth of Poland. The empirical analysis makes use of linear and nonlinear Granger causality tests to evaluate the applicability of Wagner’s Law and that of the contrasting Keynesian theory.We employ aggregate and disaggregate data with the sub-categories of most important budgetary expenditure, including health care and social security, education and science, national defence and public security expenditure and government administration expenditure for the period Q1 2000 to Q3 2008. This causality analysis indicates that total relation between budgetary expenditure and economic growth is consistent with Keynesian theory. The results of our computations have important policy implications. In case of Poland the health care expenditure was found to be as important for economic growth as expenditures on education and science. Furthermore, in order to stimulate economic growth, Polish government should consider reallocating some of national defence, public security and government administration expenditure to health care, social security, education and science expenditure.

Keywords: Government; expenditure; ·; Linear; and; nonlinear; causality; ·; Bootstrap; techniques (search for similar items in EconPapers)
JEL-codes: C01 E21 (search for similar items in EconPapers)
Date: 2011-12-01
New Economics Papers: this item is included in nep-fdg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The relationship between budgetary expenditure and economic growth in Poland (2012)
Working Paper: The relationship between budgetary expenditure and economic growth in Poland (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:35784

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