Impacts of Central Government Budget Deficits and Economic Freedom on Economic Growth in OECD Nations: P2SLS Estimates, 2006-2012 - L’impatto dei deficit di bilancio e della libertà economica sulla crescita nei paesi ocse: stime 2006-2012

Richard Cebula ()

Economia Internazionale / International Economics, 2013, vol. 66, issue 1, 25-45

Abstract: This study empirically investigates the impacts of central government budget deficits and economic freedom on per capita real economic growth in OECD nations over the period 2006-2012. Economic growth is measured by the percentage growth rate of purchasing-power-parity adjusted real per capita GDP. Within the context of the Fixed-Effects Model, panel two stage least squares (P2SLS) estimations using an unbalanced seven-year panel dataset for the OECD member nations as a group reveal that economic growth is a decreasing function of higher central government budget deficits and an increasing function of economic freedom. It is suggested that governments can best promote real economic growth by limiting the size of their budget deficits (relative to GDP) and pursuing policies consistent with increasing (or, at the very least, not decreasing) various forms of economic freedom. - Questo lavoro esamina l’impatto dei deficit di bilancio e della libertà economica sulla crescita reale pro capite nei paesi OCSE nel periodo 2006- 2012. La crescita economica è misurata dal tasso percentuale di crescita del PIL reale pro capite con il principio della parità dei poteri d’acquisto. Nel ‘Modello a Effetto Fisso’ le stime basate sul metodo dei minimi quadrati a due stadi (P2SLS), utilizzando un data set di sette anni per un gruppo di paesi dell’OCSE, rivelano che la crescita economica è funzione decrescente del deficit del bilancio centrale e funzione crescente della libertà economica. I risultati suggeriscono che la crescita economica risulta favorita da politiche di contenimento della spesa pubblica coerenti con misure di crescente libertà economica.

Keywords: Percentage Per Capita Real GDP Growth; Government Budget Deficits; Economic Freedom (search for similar items in EconPapers)
JEL-codes: F43 H61 P10 P16 (search for similar items in EconPapers)
Date: 2013
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