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Fiscal Spending And Economic Growth

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  • DEOCKHYUN RYU

    (Chung-Ang University, Korea)

Abstract

This study aims at providing both a theoretical survey and an empirical analysis of the effect of government spending on economic growth. There have been numerous debates regarding how government spending affects economic growth at various levels and via different paths. We can categorize fiscal spending by either function or nature. This study examines the effects of fiscal spending of various functional categories and groups thereof. From the empirical analyses we find evidence that an excessive fiscal spending in infrastructure area may negatively affect future economic growth.

Suggested Citation

  • Deockhyun Ryu, 2015. "Fiscal Spending And Economic Growth," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(4), pages 91-105, December.
    • Handle: RePEc:jed:journl:v:40:y:2015:i:4:p:91-105
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    References listed on IDEAS

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    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Ram, Rati, 1986. "Government Size and Economic Growth: A New Framework and Some Evidencefrom Cross-Section and Time-Series Data," American Economic Review, American Economic Association, vol. 76(1), pages 191-203, March.
    3. Chen, Sheng-Tung & Lee, Chien-Chiang, 2005. "Government size and economic growth in Taiwan: A threshold regression approach," Journal of Policy Modeling, Elsevier, vol. 27(9), pages 1051-1066, December.
    4. Hans Pitlik & Margit Schratzenstaller-Altzinger, 2011. "Growth Implications of Structure and Size of Public Sectors," WIFO Working Papers 404, WIFO.
    5. Norman Gemmell & Richard Kneller & Ismael Sanz, 2016. "Does the Composition of Government Expenditure Matter for Long-Run GDP Levels?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(4), pages 522-547, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Fiscal Spending; Functional Expenditure; SOC Expenditure; Non-Linear Economic Growth Path;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H1 - Public Economics - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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