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HOW CAN PUBLIC SPENDING HELP YOU GROW? AN EMPIRICAL ANALYSIS FOR DEVELOPING COUNTRIES
Author(s) -
Bayraktar Nihal,
MorenoDodson Blanca
Publication year - 2015
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.2012.00473.x
Subject(s) - economics , per capita , public spending , public expenditure , sample (material) , empirical research , empirical evidence , core (optical fiber) , developing country , macroeconomics , public economics , econometrics , monetary economics , public finance , economic growth , population , philosophy , chemistry , materials science , demography , epistemology , chromatography , sociology , politics , political science , law , composite material
Although many studies indicate that both the level and composition of public spending are significant for economic growth, the results in the empirical literature are mixed. This paper suggests that the country sample selection and expenditure classification are important in explaining these conflicting results. The empirical analysis shows that the link between growth and public spending, especially its core component, is strong only for countries with macroeconomic stability and fast GDP per capita growth dynamics, which are also capable of using public funds for productive purposes.