Productive Government Expenditure and Economic Growth

53 Pages Posted: 2 Jun 2008

See all articles by Andreas Irmen

Andreas Irmen

University of Luxembourg - Ceter for Research in Economic Analysis (CREA); CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Munich

Johanna Kuehnel

Heidelberg University - Alfred Weber Institute for Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2008

Abstract

We provide a comprehensive survey of the recent literature on the link between productive government expenditure and economic growth. Starting with the seminal paper of Robert Barro (1990) we show that an understanding of the core results of the ensuing contributions can be gained from the study of their respective Euler equations. We argue that the existing literature incorporates many relevant aspects, however, policy recommendations tend to hinge on several knife-edge assumptions. Therefore, future research ought to focus more on idea-based endogenous growth models to check the robustness of policy recommendations. Moreover, the inclusion of hitherto unexplored types of government expenditure, e. g., on the "rule of law", would be desirable.

Keywords: economic growth, government expenditure, public goods, fiscal policy

JEL Classification: E62, H10, H21, H41, H54, O41

Suggested Citation

Irmen, Andreas and Kuehnel, Johanna, Productive Government Expenditure and Economic Growth (May 2008). CESifo Working Paper Series No. 2314. Available at SSRN: https://ssrn.com/abstract=1139790

Andreas Irmen (Contact Author)

University of Luxembourg - Ceter for Research in Economic Analysis (CREA) ( email )

162a, avenue de la Faïencerie
Luxembourg, L – 1511
Luxembourg

HOME PAGE: http://wwwen.uni.lu/recherche/fdef/crea/people/andreas_irmen

CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Munich

Poschinger Str. 5
Munich, DE-81679
Germany

Johanna Kuehnel

Heidelberg University - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 58
Heidelberg, D-69115
Germany

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