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Role of government spending on economic growth: an endogenous potential model for Bolivia

Author

Listed:
  • Banegas Rivero, Roger Alejandro

    (Director del Instituto de Investigaciones Económicas y Sociales “José Ortiz Mercado” (IIES-JOM))

Abstract

The purpose of this paper is to contribute with an endogenous potential growth model (EPGM) for Bolivia from 1993 to 2012. The empirical evidence suggests that government consumption is the main exogenous determinant on potential growth (EPGM) with differentiated time effects: it accelerates contemporaneously economic growth but it affects negative and dynamically on long-term growth rate. Public and private investments have significant and dynamical degree of substitution (crowding out effect). As complementary analysis, effects of public spending on real effective growth are evaluated.

Suggested Citation

  • Banegas Rivero, Roger Alejandro, 2016. "Role of government spending on economic growth: an endogenous potential model for Bolivia," Revista Nicolaita de Estudios Económicos, Universidad Michoacana de San Nicolás de Hidalgo, Instituto de Investigaciones Económicas y Empresariales, vol. 0(1), pages 27-48.
    • Handle: RePEc:ris:rnicee:0100
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    More about this item

    Keywords

    Role of public spending; crowding-out effect; potential output growth; real effective growth;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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