Economic Growth and Budgetary Components: a Panel Assessment for the EU

Antonio Afonso and Juan González Alegre

No 2007/29, Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

Abstract: 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.

Keywords: economic growth; panel models; fiscal policy. (search for similar items in EconPapers)
JEL-codes: C23 E62 H50 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-mac
Date: 2007
View list of references

Downloads: (external link)
http://pascal.iseg.utl.pt/~depeco/wp/wp292007.pdf (application/pdf)

Related works:
Working Paper: Economic growth and budgetary components - a panel assessment for the EU (2008)
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: http://EconPapers.repec.org/RePEc:ise:isegwp:wp292007

Access Statistics for this paper

More papers in Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.
Address: Department of Economics, School of Economics and Management (ISEG), Technical University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Series data maintained by Vitor Escaria ().