Government expenditure and economic growth in Euro area countries

Abstract

In this article, the author examines the impact of government expenditure on economic growth. A review of empirical studies shows that researchers have found a negative link between government spending and economic growth in most cases. This paper is based on yearly data between 1995 and 2020 in euro area countries, with the application of linear regression on panel data. The main purpose is to determine whether government spending affects economic growth and, if so, how. Based on the econometrics model applied, the author established that in panel data, government expenditure has a negative impact on economic growth, more precisely, if government spending as a share of GDP increases by 1%, economic growth decreases by 0.509%. In addition, there is a significant negative relationship between government expenditure and economic growth for each country as well as the entire panel.

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Data

Language:	English
Year of publishing:	2022
Typology:	1.01 - Original Scientific Article
Organization:	UM EPF - Faculty of Economics and Business
UDC:	336.1:061.1EU
COBISS:	142443267
ISSN:	0547-3101
Views:	413
Downloads:	134
Average score:	0 (0 votes)
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Other data

Secondary language:	Slovenian
Secondary title:	Vladni izdatki in gospodarska rast v državah evro območja
Secondary abstract:	V tem članku preučujemo vpliv vladnih izdatkov na gospodarsko rast. Pregled empirične literature kaže, da v večini primerov obstaja negativna povezava med javnimi izdatki in gospodarsko rastjo. Naša raziskava temelji na podatkih držav evro območja v obdobje med 1995 in 2020 z uporabo ekonometrične analize panelnih podatkov. Glavni namen je ugotoviti, ali vladi izdatki vplivajo na gospodarsko rast, in če da, kako. Na podlagi ocene našega ekonometričnega modela panelnih podatkov ugotavljamo, da imajo vladni izdatki izraženi v deležu BDP negativen vpliv na gospodarsko rast, natančneje, če se delež vladnih izdatkov v BDP poveča za 1 %, se bo gospodarska rast zmanjšala za 0,509 %. Negativna povezava je statistično značilna tako za celoten panel kot tudi za vsako izmed posameznih držav.
Secondary keywords:	zadolženost;gospodarska rast;javne finance;javni izdatki;evro območje;Evropska unija;
Type (COBISS):	Scientific work
Pages:	str. 19-27
Volume:	ǂVol. ǂ68
Issue:	ǂno. ǂ2
Chronology:	2022
DOI:	10.2478/ngoe-2022-0008
ID:	26525620