Economic growth and budgetary components: a panel assessment for the EU

• Autor(a) principal: Afonso, António
• Data de Publicação: 2011
• Outros Autores: González Alegre, Juan
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.5/25603
• topic: Government Budgetary; GDP Growth; 15 EU; Economic Growth; Public Investment; Produtivity; Public Expenditure; Social Security

In this article, we test to determine whether a reallocation of government budgetary components can enhance long-term GDP growth in a set of 15 EU countries. We apply panel data techniques to the period 1971–2006, and use three alternative dependent variables in a growth regression: economic growth, total factor productivity and labour productivity. Our results also identify the distortions induced by public expenditure in the private factors allocation. In particular, we detect a strong crowding-in effect associated to public investment, which has enhanced economic growth by boosting private investment. We also associate a dependence of productivity on public expenditure on social security.