Public investment multipliers in EU countries: Does the efficiency of public sector matter?

Sotiris Papaioannou ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines whether differences in public sector efficiency are associated with diverging effects of public investment on growth. At first stage, we estimate public investment multipliers for each country of the European Union (EU). Their size varies considerably across countries. Then we construct measures of public sector efficiency which are used in the econometric analysis to study the relationship between public investment and growth. The main result of the econometric analysis is that the efficiency of public sector indeed matters in raising the influence of public investment on growth. This result remains robust to several changes in the econometric specification and to various measures of government efficiency which used as explanatory variables in the econometric estimations.

Keywords: Public investments; Fiscal multipliers; Public sector efficiency; Economic growth. (search for similar items in EconPapers)
JEL-codes: E62 H30 O40 (search for similar items in EconPapers)
Date: 2016-03-22
New Economics Papers: this item is included in nep-eec, nep-eff, nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70332

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