Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26359 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2314
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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.
Subjects: 
economic growth
government expenditure
public goods
fiscal policy
JEL: 
E62
H10
H21
H41
H54
O41
Document Type: 
Working Paper
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