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Government Expenditure in Suriname: A Stimulus or Impediment to Growth

Author

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  • Mungroo, Albert
  • Ooft, Gavin
  • Tjon Kie Sim-Balker, Peggy

Abstract

This paper examines the relationship between government expenditures and economic growth in Suriname from 1971 to 2011. According to the Keynesian theory it is the government's responsibility to stimulate or dampen economic growth within the country by using fiscal policy. For the last decade Suriname has experienced sustained economic growth. Some schools of economic thought argue that government expenditure has a positive effect in prolonging and sustaining growth while others disagree. A Dynamic Ordinary Least Square method is used to examine the effects of the different components of government expenditure on economic growth. Capital expenditure and subsidies & transfer are found to stimulate growth, while wages & salaries and goods & services impede growth in the long run.

Suggested Citation

  • Mungroo, Albert & Ooft, Gavin & Tjon Kie Sim-Balker, Peggy, 2014. "Government Expenditure in Suriname: A Stimulus or Impediment to Growth," EconStor Preprints 215531, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:215531
    Note: The views expressed in this research paper are those of the authors and do not necessarily represent those of the Centrale Bank van Suriname. Research papers describe research in progress by the authors and are published to elicit comments and to further debate.
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal Policy; Economic Growth; Linear Regression;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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