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Crowding‐out and crowding‐in effects of the components of government expenditure
Author(s) -
Ahmed H.,
Miller SM.
Publication year - 2000
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2000.tb00011.x
Subject(s) - crowds , economics , crowding out , investment (military) , aggregate expenditure , government expenditure , monetary economics , debt , government spending , public finance , sample (material) , government (linguistics) , developing country , constraint (computer aided design) , welfare , budget constraint , social security , public economics , labour economics , macroeconomics , microeconomics , economic growth , market economy , philosophy , computer security , law , linguistics , chemistry , computer science , engineering , chromatography , political science , mechanical engineering , politics
This article examines the effects of disaggregated government expenditure on investment using fixed‐ and random‐effect methods. Using the government budget constraint, the analysis explores the effects of tax‐ and debt‐financed expenditure for the full sample, and for subsamples of developed and developing countries. In general, tax‐financed government expenditure crowds out more investment than debt‐financed expenditure. Expenditure on social security and welfare reduces investment in all samples while expenditure on transport and communication induces private investment in developing countries.