Government spending and economic growth in the OECD countries |
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Authors: | Michael Connolly Cheng Li |
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Affiliation: | 1. Department of Economics, School of Business, University of Miami, Coral Gables, FL, USA;2. Department of Finance and Economics, Mississippi State University, Mississippi State, MS, USA |
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Abstract: | Using panel data from 1995 to 2011 for 34 OECD countries, we examine the effects of government consumption spending, public social spending, and public investment on economic growth. We use a generalized method of moments estimation technique to solve inconsistency problems with fixed effects and random effects panel estimation. We find that an increase in public social spending has a significant negative effect on subsequent economic growth. Government consumption spending and public investment have no significant effect on subsequent economic growth. |
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Keywords: | economic growth government consumption spending public social spending investment generalized method of moments |
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