Crowding-Out and Crowding-In Effects of the Components of Government Expenditure

Habib Ahmed and Stephen Miller
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Habib Ahmed: Islamic Development Bank
Authors registered in the RePEc Author Service: Habib Ahmed () and Ahmed Mohamed Habib ()

No 1999-02, Working papers from University of Connecticut, Department of Economics

Abstract: We examine the effects of disaggregated government expenditure on investment using fixed- and random-effect methods. Using the government budget constraint, we explore the effects of tax- and debt-financed expenditure for the full sample, and for sub-samples of developed and developing countries. In general, tax-financed government expenditure crowds out more investment than debt-financed expenditure. Expenditure on social security and welfare reduces investment in all samples while expenditure on transport and communication induces private investment in developing countries.

Keywords: crowding out/crowding in. investment; government expenditure (search for similar items in EconPapers)
JEL-codes: E2 E6 O4 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1999-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Published in Contemporary Economic Policy, January 2000

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Journal Article: Crowding‐out and crowding‐in effects of the components of government expenditure (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:1999-02

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