 Budgetary choice and its path to economic growth in the US states: does total expenditure stabilisation work as a mediating factor?Sungchan Kim and Soyoung Park International Journal of Economics and Business Research, 2020, vol. 20, issue 2, 138-151 Abstract: As the three roles of government are closely related to economic growth (Moreno-Dodson, 2008; Musgrave, 1959), state governments also play a similar role in pursuing economic growth by adopting two budgetary choices. The first choice, the allocation role, involves investing in capital expenditures, while the second choice, the stabilisation role, involves saving money for the future. However, compared to the central government, little is known about the effectiveness of budgetary choice at the subnational level. Thus, this paper investigates whether spending on capital expenditures and saving for the future are effective for state governments in the USA, and how another role of government affects economic growth. The empirical results demonstrate that making capital expenditures and saving for the future are positively related to economic growth in state government. However, the volatility of total expenditures does not have a significant relationship with economic growth. Keywords: capital expenditures; state government saving; economic growth; expenditure volatility; structural equation model; capital expenditure; BSFs; budget stabilisation funds. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:20:y:2020:i:2:p:138-151 Access Statistics for this article More articles in International Journal of Economics and Business Research from Inderscience Enterprises Ltd |
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