Fiscal Policy and Long-Run Growth

Tanzi, Vito; Zee, Howell H.

doi:10.2307/3867542

Cited by 225 publications

(113 citation statements)

References 79 publications

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“…We put forward a contradictory argument for Congo, that is, a positive result in conformity to Devarajan, Swaroop and Zoo (1996) results. These authors approve Easterly and Rebelo (1993) and later Tanzi and Zee (1997) results which advocate for a differentiation between direct and indirect effects of public expenditures upon economic growth. In principle, current public expenditures support demand and cause a short term GDP increase through Keynesian multiplier effect.…”

Section: Results Discussionmentioning

confidence: 99%

“…4(1), March 2016 If during a short term period public expenditures affect economic growth through a public expenditure multiplier and that of transfers, they can in long run affect economic growth by two channels at least (Tanzi and Zee, 1997) in increasing directly economy capital stock through public investment in infrastructure or public enterprise investment, in increasing indirectly marginal productivity of production factors provided by private sector through education, health, and other services expenditures which contribute to the accumulation of human capital.…”

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confidence: 99%

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Public Expenses and Economic Growth in Congo

Ngakosso¹

2016

JEDS

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This article aims to proceed an econometric appraisal of the connection between the total public expenses and their components (capital from public expenses and current ones) and the economic growth in Congo from 1960 to 2013.We have therefore analyzed the links of causality according to GRANGER's view and have carried out the valuation of the design on the long term and the pattern for correcting mistakes using the ordinary least square method (OLS) between those expenses and the economic growth. We have found out a mutual causality bond between the current public expenses and the economic growth. However, no causal link has been established between the investment expenses and the economic growth. But, according to GRANGER's point of view, the total public expenses determine the economic growth. Moreover, our results point out that the investment expenses, the current and the total ones have positive impacts during a short term as well as in a long one when dealing with the economic growth in Congo.

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Section: Results Discussionmentioning

confidence: 99%

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confidence: 99%

Public Expenses and Economic Growth in Congo

Ngakosso¹

2016

JEDS

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“…With this distinction they argued that both sides of the government budget should be considered in estimating the impact of fiscal policy on growth, as their financing offset the growth-enhancing effects of productive expenditure. Gerson (1998) and Tanzi and Zee (1997) surveyed the theoretical and empirical literature on the effect of fiscal policy variables (tax policy, public expenditure policy, budget policy) on economic growth. They concluded that fiscal policy variables influenced economic growth through their impact on the determinants of growth.…”

Section: Review Of Related Literaturementioning

confidence: 99%

Fiscal Policy, Institutions and Economic Growth in Asian Economies: Evidence from the Pedroni’s Cointegration Approach

Abdullah¹,

Habibullah²,

Baharumshah³

2009

IJBM

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This paper investigates the relationship between fiscal policy, institutions and economic growth in Asian between 1982 and 2001 through the application of Pedroni's Cointegration approach. It examines three different channels through which fiscal policy can affect long run economic growth in Asia. The first channel is when components of fiscal policy affects the real per capita GDP and the second channel is when the institutions included in components of fiscal policy affects the real per capita GDP. The third channel is when institutions interact with aggregate of government expenditure and aggregate of fiscal policy affects the real per capita GDP. The Pedroni Cointegration result establishes a long run relationship between fiscal policy, institutions and economic growth. We find positive and statistically significant impact of health and education expenditure, aggregate of government expenditure, aggregate of fiscal policy and institutions on real per capita GDP. We also find that the defence expenditure, distortionary taxation and budget balance are significantly and negatively related to real per capita GDP. Furthermore, we find that aggregate of government expenditure and aggregate of fiscal policy variables interact with institutions variable and have a potential impact on long-run steady-state levels of growth.

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“…They found that the level of education expenditure and the growth rate of public infrastructure investment both exhibited a positive impact on the growth rate of the economy. Tanzi and Zee (1997) examined systematically the various ways that the main fiscal instruments (tax policy, public expenditure policy, budget policy) influenced economic growth through their impact on the determinants of growth. Yasin (2003) studied the relationship between government expenditure and economic growth.…”

Section: Review Of Related Literaturementioning

confidence: 99%

The Effect of Fiscal Variables on Economic Growth in Asian Economies: A Dynamic Panel Data Analysis

Abdullah¹,

Habibullah²,

Baharumshah³

2009

IJBM

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This paper investigates the effect of relationship between fiscal variables and economic growth in Asian economies using a generalized method of moments (GMM) method as a dynamic panel data analysis over the 1985-2001 periods. These data contain a number of time invariant and time varying variables, where the time varying variables are averaged over four year It examines two different channels through which fiscal policy can affect long run economic growth in Asia. The first channel is when components and aggregate government expenditure affects the real per capita GDP and the second channel is when the components and aggregate of other fiscal variables affects the real per capita GDP. The dynamic panel data result especially GMM-SYS establishes a long run relationship between fiscal policy and economic growth. We find positive and statistically significant impact of health and education expenditure, aggregate of government expenditure and aggregate of other fiscal variables on real per capita GDP. Furthermore, we find that the defence expenditure, distortionary taxation and budget balance are significantly and negatively related to real per capita GDP.

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Fiscal Policy and Long-Run Growth

Cited by 225 publications

References 79 publications

Public Expenses and Economic Growth in Congo

Public Expenses and Economic Growth in Congo

Fiscal Policy, Institutions and Economic Growth in Asian Economies: Evidence from the Pedroni’s Cointegration Approach

The Effect of Fiscal Variables on Economic Growth in Asian Economies: A Dynamic Panel Data Analysis

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