Fiscal Policy and Economic Growth: An Empirical Investigation

William Easterly and Sergio Rebelo ()

No 4499, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper describes the empirical regularities relating fiscal policy variables, the level of development and the rate of growth. We employ historical data, recent cross-section data, and newly constructed public investment series. Our main findings are: (i) there is a strong association between the development level and the fiscal structure: poor countries rely heavily on international trade taxes, while income taxes are only important in developed economies; (ii) fiscal policy is influenced by the scale of the economy, measured by its population; (iii) investment in transport and communication is consistently correlated with growth while the effects of taxation are difficult to isolate empirically.

JEL-codes: E62 O40 (search for similar items in EconPapers)
Date: 1993-10
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1059)

Published as Easterly, William & Rebelo, Sergio. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December 1993

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Related works:
Working Paper: Fiscal Policy and Economic Growth: An Empirical Investigation (1994)
Journal Article: Fiscal policy and economic growth: An empirical investigation (1993)
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