Fiscal policy and growth: evidence from OECD countries

Kneller, Richard; Bleaney, Michael; Gemmell, Norman

doi:10.1016/s0047-2727(99)00022-5

Cited by 813 publications

(810 citation statements)

References 20 publications

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“…The standard approach is to include a common time trend (or time fixed effects) and country fixed effects, as done in e.g. Kneller et al (1999), Romero-Avila (2006) and Arnold et al (2011). In this paper, we pursue an alternative potentially promising, way out of the omitted variables problem by exploiting the strong cross-sectional dependence observed in macroeconomic data (see e.g.…”

Section: Introductionmentioning

confidence: 99%

Fiscal policy and TFP in the OECD: measuring direct and indirect effects

2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Statement of purpose:The purpose of these working papers is to promote the circulation of research results (Research Series) and analytical studies (Documents Series) made within the National Bank of Belgium or presented by external economists in seminars, conferences and conventions organised by the Bank. The aim is therefore to provide a platform for discussion. The opinions expressed are strictly those of the authors and do not necessarily reflect the views of the National Bank of Belgium. JEL classification: C31, C33, E62, O38 Orders

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Section: Introductionmentioning

confidence: 99%

Fiscal policy and TFP in the OECD: measuring direct and indirect effects

2014

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“…1 Using a panel data set for 22 OECD countries during 1970, Kneller et al (1999 found that increasing public spending by 1% of GDP increases the growth rate by 0.1-0.2%. In the United States, for instance, the federal government has frequently used the spending tool via expanding infrastructure investment to fight against economic recession.…”

Section: Introductionmentioning

confidence: 99%

Central government's infrastructure investment across Chinese regions: A dynamic spatial panel data approach

Zheng

Song

et al. 2013

China Economic Review

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This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central gove investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.JEL classification: H54, C33, R0

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“…on economic growth. Some of these studies suggest that public sector consumption is negatively related with economic growth [Barro (1991); Levine and Renelt (1992); Kneller et al (1999)], while others suggest the opposite [Devarajan (1996)]. …”

Section: Previous Literaturementioning

confidence: 99%

“…Similarly, though assumed axiomatically to have a positive impact in boosting private productivity, public investment is found to have a positive effect on economic growth [Aschauer (1989); Barro (1991); Easterly and Rebelo (1993); Kneller et al (1999)], and a negative effect in others [Devarajan (1996)]. Education indicators are also subject to conflicting results.…”

Section: Previous Literaturementioning

confidence: 99%

“…Some studies have found a positive association between human capital investment and economic growth [Barro (1991); Mankiw et al (1992); Easterly and Rebelo (1993)]; other studies, by addressing some endogeneity problems and using a panel data, have found a negative relationship between economic growth and measures of human capital investment [Islam (1995); Caselli et al (1996)]. This wide array of results can be explained by, among other things, ignoring other economic policies that take place along with fiscal policies, differences in the set of explanatory variables [Levine and Renelt (1992)], overlooking government budget constraints [Kneller et al (1999)]. …”

Section: Previous Literaturementioning

confidence: 99%

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Distributional Effects of Growth and Public Expenditures in Africa: Estimates for Tanzania and Rwanda

Almanzar

Torero

2017

World Development

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In this paper we explore the effects of fiscal policies and growth on measures of the household welfare across the distribution of expenditure for two countries in Africa: Rwanda and Tanzania. We explore issues of inefficiency in government expenditures and dilution of growth benefits among the better off sectors of the population in these two countries (in lieu of the poor sectors) by looking at the effects within a country and across different groups of households and administrative entities. We exploit variation in expenditures and growth across and within regions of each country to estimate the elasticities of income with respect to these expenditures at different points of the expenditure distribution, using household survey data and government expenditure at the district level. We find that overall, mean income growth benefits the top income groups. The welfare spillovers are mostly present for top 20% of the income distribution, with the middle of the distribution in Tanzania responding slightly to these spillovers. Social Public expenditures does not affect inequality in a considerable manner, but tend to work towards decreasing inequality. However, mean income growth is related to 'increases' in inequality in the sense that the richest sectors of the population benefit the most from growth. We find that the growth elasticity of income is only above one for the top quintile in both countries. In Tanzania a 1% increase in average household expenditure is related to a 1.96% expenditure growth in the top quintile and 0.43% in the third quintile. While in Rwanda it is related to a 1.93% increase in household expenditure in the top 20% of the distribution.

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Fiscal policy and growth: evidence from OECD countries

Cited by 813 publications

References 20 publications

Fiscal policy and TFP in the OECD: measuring direct and indirect effects

Fiscal policy and TFP in the OECD: measuring direct and indirect effects

Central government's infrastructure investment across Chinese regions: A dynamic spatial panel data approach

Distributional Effects of Growth and Public Expenditures in Africa: Estimates for Tanzania and Rwanda

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