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Author: Willi Semmler
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
Author: Willi Semmler
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 36
Get Book
Book Description
Author: Willi Semmler
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper responds to the development policy debate involving the World Bank and the IMF on the use of fiscal policy not only for economic stabilization but also to promote economic growth and increase per capita income. A key issue in this debate relates to the effect of the composition of public expenditure on economic growth. Policy makers and some researchers have argued that expenditure on growth-enhancing functions could enhance future revenue and justify the provision of "fiscal space" in the budget. But there are no simple ways to identify the growth-maximizing composition of public expenditure. The current paper lays out a research strategy to explore the effects of fiscal policy, including the composition of public expenditure, on economic growth, using a time series approach. Based on the modeling strategy of Greiner, Semmler and Gong (2005) we develop a general model that features a government that undertakes public expenditure on (a) education and health facilities which enhance human capital, (b) public infrastructure such as roads and bridges necessary for market activity, (c) public administration to support government functions, (d) transfers and public consumption facilities, and (e) debt service. The proposed model is numerically solved, calibrated and the impact of the composition of public expenditure on the long-run per capita income explored for low-, lower-middle- and upper-middle-income countries. Policy implications and practical policy rules are spelled out, the extension to an estimable model indicated, a debt sustainability test proposed, and the out-of-steady-state dynamics studied.
Author: Willi Semmler
Publisher:
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
This paper responds to the development policy debate involving the World Bank and the IMF on the use of fiscal policy not only for economic stabilization but also to promote economic growth and increase per capita income. A key issue in this debate relates to the effect of the composition of public expenditure on economic growth. Policy makers and some researchers have argued that expenditure on growth-enhancing functions could enhance future revenue and justify the provision of quot;fiscal spacequot; in the budget. But there are no simple ways to identify the growth-maximizing composition of public expenditure. The current paper lays out a research strategy to explore the effects of fiscal policy, including the composition of public expenditure, on economic growth, using a time series approach. Based on the modeling strategy of Greiner, Semmler and Gong (2005) we develop a general model that features a government that undertakes public expenditure on (a) education and health facilities which enhance human capital, (b) public infrastructure such as roads and bridges necessary for market activity, (c) public administration to support government functions, (d) transfers and public consumption facilities, and (e) debt service. The proposed model is numerically solved, calibrated and the impact of the composition of public expenditure on the long-run per capita income explored for low-, lower-middle- and upper-middle-income countries. Policy implications and practical policy rules are spelled out, the extension to an estimable model indicated, a debt sustainability test proposed, and the out-of-steady-state dynamics studied.
Author: Nihal Bayraktar
Publisher:
ISBN:
Category :
Languages : en
Pages : 74
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Book Description
This paper presents a small-scale intertemporal model of endogenous growth that accounts for the composition of public expenditure and externalities associated with public capital. Government spending is disaggregated into various components, including maintenance, security, and investment in education, health, and core infrastructure. After studying its long-run properties, the model is calibrated for Haiti, using country-specific information as well as parameter estimates from the literature. A variety of policy experiments are then reported, including a reallocation of spending aimed at creating fiscal space to promote public investment; an improvement in fiscal management that leads to a reduction in tax collection costs; higher spending on security; and a composite fiscal package.
Author: Carlos Mulas-Granados
Publisher: INTERNATIONAL MONETARY FUND
ISBN: 9781451850000
Category :
Languages : en
Pages : 40
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Book Description
This paper assesses the effects of expenditure composition as well as fiscal adjustment on economic growth in a sample of 39 low-income countries during the 1990s. The paper finds that strong budgetary positions and fiscal consolidation are generally associated with higher economic growth in both the short and long terms. The composition of public outlays also matters: Countries where spending is concentrated on wages tend to have lower growth, while those that allocate higher shares to capital and nonwage goods and services enjoy faster output expansion. Expenditure composition, along with the size of the fiscal consolidation and initial fiscal conditions, affects the sustainability of adjustment. Initial fiscal conditions also have a bearing on the nexus between fiscal deficits and growth.
Author: United States. Congress. Joint Economic Committee
Publisher:
ISBN:
Category : Government spending policy
Languages : en
Pages : 1240
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Book Description
Author: Philip R. Gerson
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 80
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Book Description
This paper reviews the literature on the relationship between the structure of taxation and public expenditure and economic growth. Apart from its macroeconomic effects, fiscal policy can affect the rate of growth of aggregate output through many channels. The impacts of public education expenditure on human capital formation, of the provision of public sector infrastructure on the productivity of private capital, and of capital income taxation on saving are but three of these. Given the need to examine the impact of the components of expenditure and tax policy on growth, the paper adopts a disaggregated approach. Its major concern is the way in which the components of expenditure and tax policy will affect the supply and productivity of labor and of capital and the efficiency of resource allocation.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451974159
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
This paper examines the empirical evidence on the contribution that government and, in particular, capital expenditure make to the growth performance of a sample of developing countries. Using the Denison growth accounting approach, this study finds that social expenditures may have a significant impact on growth in the short run, but infrastructure expenditures may have little influence. While current expenditures for directly productive purposes may exert a positive influence, capital expenditure in these sectors appears to exert a negative influence. Experiments with other explanatory variables confirm the importance of the growth of exports to the overall growth rate.
Author: Stefano Paternostro
Publisher: World Bank Publications
ISBN:
Category : Absolute Poverty
Languages : en
Pages : 39
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Book Description
Abstract: Public spending has effects which are complex to trace and difficult to quantify. But the composition of public expenditure has become the key instrument by which development agencies seek to promote economic development. In recent years, the development assistance to heavily indebted poor countries (HIPCs) has been made conditional on increased expenditure on categories that are thought to be "pro-poor". This paper responds to the growing concern being expressed about the conceptual foundations and the empirical basis for the belief that poverty can be reduced through targeted public spending. While it is widely accepted that growth and redistribution are important sources of reduction in absolute poverty, a review of the literature confirms the lack of an appropriate theoretical framework for assessing the impact of public spending on growth as well as poverty. There is a need to combine principles of both public economics and growth theory to develop appropriate theoretical guidance for public expenditure policy. This paper identifies a number of approaches that are beginning to address this gap. Building on these approaches, it proposes a framework that has its foundation in a broadly articulated development strategy and its economic goals such as growth, equity, and poverty reduction. It recommends the use of public economics principles to clarify the roles of the private and public sectors and to recognize the complementarity of spending, taxation, and regulatory instruments available to affect public policy. With regard to the impact of any given type of public spending, policy recommendations must be tailored to countries and be based on empirical analysis that takes account of the lags and leads in their effects on equity and growth and ultimately on poverty. The paper sketches out such a framework as the first step in what will have to be a longer-term research agenda to provide theoretically and empirically robust and verifiable guidance to public spending policy.
Author: Mukesh Kumar Solanki
Publisher: Allied Publishers
ISBN: 8184249764
Category : Economic development
Languages : en
Pages : 134
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Book Description
The book “Public Expenditure, Economic Growth and Inflation” addresses the most relevant issue of inflation in Indian economy. It makes an interesting reading as it attempts to establish the relationship among three macro-economic indicators, i.e., public expenditure, economic growth and inflation. The book gives an overview of the increasing public expenditure and its composition throughout the years after independence. Based on the secondary data the study makes a sincere effort to establish the possible relationship between public expenditure, inflation and economic growth. The book finds out that the Wagner law of increasing state activity is applicable in India both in absolute and relative terms. Economic Growth and public expenditure are positively correlated. Economic growth and inflation are inversely related. As public expenditure is motivated by maximization of social welfare, reduction in public expenditure means to sacrifice the social welfare objective.
