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Vliv vládních výdajů a daní na ekonomický růst (empirická analýza)
[Government Expenditures and Taxes Influence on the Economic Growth (Empirical Analysis)]

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  • Vratislav Izák

Abstract

Starting from endogenous growth models we test the impacts of both taxes (distortionary and non-distortionary) and expenditures (taking into account economic and functional classification of general government expenditure) using the government constraint. We do not neglect the implicit financing assumptions built into the specification of regression utilising both control and fiscal variables. Static and dynamic panel analysis (fixed effects model) of the 25 EU countries covers the period 1995-2008 for the majority of observations. Forward looking moving averages of the growth rate of GDP (2-5 years) are the dependent variable. We find that productive government expenditure supports growth, whilst non-productive expenditure, especially social protection (COFOG) or social payments (Ameco) does not. Distortionary and indirect taxes reduce economic growth.

Suggested Citation

  • Vratislav Izák, 2011. "Vliv vládních výdajů a daní na ekonomický růst (empirická analýza) [Government Expenditures and Taxes Influence on the Economic Growth (Empirical Analysis)]," Politická ekonomie, Prague University of Economics and Business, vol. 2011(2), pages 147-163.
    • Handle: RePEc:prg:jnlpol:v:2011:y:2011:i:2:id:778:p:147-163
    DOI: 10.18267/j.polek.778
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    More about this item

    Keywords

    economic growth; ESA 95; government budget constraint; fixed effects model; productive expenditure; COFOG;
    All these keywords.

    JEL classification:

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

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