Budget Deficits and Economic Growth

Willie Belton and Richard Cebula ()

MPRA Paper from University Library of Munich, Germany

Abstract: The present paper examines the impact that budget deficits exercise on economic growth in the United States. Using a simple growth model that includes a variety of public policy variables, we provide Instrumental Variables (IV) estimates that indicate growth in the United States over time. The findings imply that higher levels of government spending have a minimal effect on economic growth, whereas higher budget deficits and tax rates reduce economic growth.

Keywords: budget deficits; economic growth; taxes; government spending (search for similar items in EconPapers)
JEL-codes: E02 H62 O47 (search for similar items in EconPapers)
Date: 1992-06-04
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Citations: View citations in EconPapers (17)

Published in American Statistical Association 1993 Proceedings of the Business and Economic Statistics Section 1.88(1993): pp. 343-347

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61413

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