Year: 2011
Type: article
Abstract: Starting from endogenous growth models we test the impacts of both taxes (distortionary and non-distortionary) and expenditures (taking into account economic and functional classification of general government expenditure) using the government constraint. We do not neglect the implicit financing assumptions built into the specification of regression utilising both control and fiscal variables. Static and dynamic panel analysis (fixed effects model) of the 25 EU countries covers the period 1995-2008 for the majority of observations. Forward looking moving averages of the growth rate of GDP (2-5 years) are the dependent variable. We find that productive government expenditure supports growth, whilst non-productive expenditure, especially social protection (COFOG) or social payments (Ameco) does not. Distortionary and indirect taxes reduce economic growth.
Source: Politická ekonomie
DOI: 10.18267/j.polek.778
Author: Vratislav Izák
Institution: Prague University of Economics and Business
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W2188241171