Econometric Analysis of Fiscal Policy Budget Constraints in Endogenous Growth Models

Yoshihiko Tsukuda () and Tatsuyoshi Miyakoshi ()
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Yoshihiko Tsukuda: Tohoku University
Tatsuyoshi Miyakoshi: Osaka University

Economics Bulletin, 2010, vol. 30, issue 4, 2884-2894

Abstract: Kneller et al. (1999) examined the predictions of the public-policy endogenous growth models of Barro (1990) and others that suggest that unlike distortionary taxation and productive expenditures, nondistortionary taxation and nonproductive expenditures have no direct effect on the rate of growth. This paper provides an econometric theory with their empirical methodology and applies to work by Kneller et al. (1999) as a numerical example to show how the econometric theory works in practice. This paper also confirms from the viewpoint of econometric analysis that their study supports the Barro (1990)'s predictions.

Keywords: Fiscal budget constraint; multicollinearity; omitted variables, econometrics (search for similar items in EconPapers)
JEL-codes: C1 H5 (search for similar items in EconPapers)
Date: 2010-11-08
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