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Government Expenditures

In: Economic Growth in Theory and Practice

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  • R. M. Sundrum

Abstract

Another major source of demand distinguished in Chapter 8 is government expenditures. We consider this source of demand in this chapter, and how it is related to the national income of countries. As in the case of investment, there are at least three forms in which this relationship can be studied; (a) the relationship between the level of government expenditures and the level of income; (b) the relationship between the level of government expenditures and the growth of income, and (c) the relationship between the growth of government expenditures and the growth of income. In the literature, all of these relationships have been used to investigate the effect of government expenditures on the national income. But it is important to distinguish among these three relationships, because they refer to different ways in which government expenditures influence the level and the growth of national income. We therefore consider each of these relationships in turn, beginning with the relationship between the level of government expenditures and the level of national income.

Suggested Citation

  • R. M. Sundrum, 1990. "Government Expenditures," Palgrave Macmillan Books, in: Economic Growth in Theory and Practice, chapter 9, pages 182-198, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-37681-6_9
    DOI: 10.1057/9780230376816_9
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