How Does Fiscal Policy Affect Investment? Evidence from a Large Panel | Zendy

Afonso António | Zendy; Jalles João Tovar | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Premium

How Does Fiscal Policy Affect Investment? Evidence from a Large Panel

Author(s) -

Afonso António,

Jalles João Tovar

Publication year - 2015

Publication title -

international journal of finance and economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.505

H-Index - 39

eISSN - 1099-1158

pISSN - 1076-9307

DOI - 10.1002/ijfe.1518

Subject(s) - economics , investment (military) , subsidy , government spending , panel data , monetary economics , fiscal policy , government (linguistics) , consumption (sociology) , public investment , macroeconomics , public economics , econometrics , politics , market economy , social science , linguistics , philosophy , sociology , political science , welfare , law

We assess the relevance of fiscal components for private and public investment using data for a large panel of 95 countries for the period 1970–2008. Accounting for the usual econometric pitfalls, our results suggest a negative effect of government expenditure and of government consumption spending on private investment. Interest payments and subsidies have a negative effect on both types of investment (particularly in emerging economies). Social security spending has a negative effect on private investment for the full and OECD samples, whereas government health spending has a positive and significant impact on private investment. Moreover, stronger fiscal numerical rules decrease public investment. Copyright © 2015 John Wiley & Sons, Ltd.

This content is not available in your region!

Continue researching here.

Having issues? You can contact us here

Accelerating Research