Vplyv spôsobu tvorby fiškálneho deficitu na ekonomický rast

The Influence of Fiscal Deficit Creation on Economic Growth

Martin Murín

Politická ekonomie, 2016, vol. 2016, issue 2, 176-192

Abstract: The Influence of Fiscal Deficit Creation on Economic Growth The discussion of influence of fiscal consolidation on economic growth is quite interesting and important topic. Consequently, the main aim of the article is to determine differences within the influence of fiscal deficit on the economic growth, which is caused by changes in certain groups of government expenditures and revenues. We focus on two different economic growth indicators. The first is growth rate of real GDP and the second is growth rate of potential output. The panel regression method is used which data covers 13 old EU member states in 1996 to 2013. We employ the omitted fiscal variable approach. There is a hint that every defi cit to revenue substitution has no significant growth effect. The results of expenditures imply, that government should reduce deficit created by debt service. The measure has relatively stronger effect on supply side. Potential output growth can also be supported by the deficit decrease of social expenditures. Lowering government consumption is detrimental to GDP, but it is not to potential output. There are some differences between results of two types of growth. Hence government should decide, if consolidation effect is considered against GDP or potential output at first.

Keywords: government revenues; government expenditures; fiscal deficit; economic growth; consolidation (search for similar items in EconPapers)
JEL-codes: H20 H50 H62 O40 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.18267/j.polek.1062

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