Government Expenditure and Economic Growth in Euro Area Countries

Cenc Helena ()
Additional contact information
Cenc Helena: University of Maribor, Faculty of Economics and Business, Razlagova ulica 14, 2000 Maribor, Slovenia

Naše gospodarstvo/Our economy, 2022, vol. 68, issue 2, 19-27

Abstract: In this article, the author examines the impact of government expenditure on economic growth. A review of empirical studies shows that researchers have found a negative link between government spending and economic growth in most cases. This paper is based on yearly data between 1995 and 2020 in euro area countries, with the application of linear regression on panel data. The main purpose is to determine whether government spending affects economic growth and, if so, how. Based on the econometrics model applied, the author established that in panel data, government expenditure has a negative impact on economic growth, more precisely, if government spending as a share of GDP increases by 1%, economic growth decreases by 0.509%. In addition, there is a significant negative relationship between government expenditure and economic growth for each country as well as the entire panel.

Keywords: Government expenditure; Economic growth; Euro area; Panel data (search for similar items in EconPapers)
JEL-codes: C23 E62 H41 H50 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/ngoe-2022-0008 (text/html)

Related works:
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:vrs:ngooec:v:68:y:2022:i:2:p:19-27:n:4

DOI: 10.2478/ngoe-2022-0008

Access Statistics for this article

Naše gospodarstvo/Our economy is currently edited by Vesna Čančer

More articles in Naše gospodarstvo/Our economy from Sciendo
Bibliographic data for series maintained by Peter Golla ().