Growth Accelerations: The Role of Government Expenditures and Revenues

Parekh, Saahil and Pandey, Manish (2012): Growth Accelerations: The Role of Government Expenditures and Revenues.

Abstract

Using episodes of growth spells, we attempt to resolve the issue of endogeneity by examining differences in fiscal policies before and after the start of the spell. In doing so, we seek to answer the question of whether governments change fiscal policies in response to growth accelerations or whether such changes happen prior to start of growth spells. We use statistically significant growth spells identified by Berg et al. (2011) for our analysis. We find a positive long run trend growth for aggregate ratios of government expenditures and revenues to GDP. However, we find no evidence that the growth of the variables in the pre-period or the post-period differed from their long run trend growth rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: Government expenditure; endogenous growth; government revenues
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; H - Public Economics > H0 - General; H - Public Economics > H0 - General > H00 - General

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