The long-term impact of public expenditures on GDP-growth

2020 ◽  
Vol 42 (4) ◽  
pp. 403-419
Author(s):  
Gábor Kutasi ◽  
Ádám Marton
Keyword(s):  
Fixed Effects ◽  
Social Protection ◽  
Positive Impact ◽  
Public Spending ◽  
Health Spending ◽  
Ordinary Least Squares ◽  
Public Expenditures ◽  
Gdp Growth ◽  
Method Of Moment

AbstractAre governments able to continuously boost economic growth by spending for decades? Can the state be a more efficient user of income by improving the structure of public spending? The paper analyses the correlation between various types of public expenditures and GDP growth in different countries of the EU. The database was composed from the Classification of the Functions of Government (COFOG) classification of public spending, which contains data of 25 EU economies in the period 1996–2017. Three econometric models were applied in accordance with the empirical practice found in the literature: first-differences general method of moment (GMM), fixed effects panel and ordinary least squares (OLS) models. The expenditures on social protection proved to have a negative, statistically significant and robust impact on GDP growth. The results are similar for general public spending, and while spending on public order also has a significant and robust coefficient, its sign is ambiguous. The novelty of the article relate to the findings on lagged education and health spending, which have a positive impact on GDP growth.

scholarly journals Public Expenditures for Mental Health Services in Canadian Provinces

2017 ◽  
Vol 63 (4) ◽  
pp. 250-256 ◽  
Author(s):  
Jian Wang ◽  
Philip Jacobs ◽  
Arto Ohinmaa ◽  
Anne Dezetter ◽  
Alain Lesage
Keyword(s):  
Mental Health ◽  
Mental Health Services ◽  
Health Services ◽  
Public Spending ◽  
Health Spending ◽  
Health Care Expenditures ◽  
Fiscal Year ◽  
Public Expenditures ◽  
Hospital Inpatient ◽  
Publicly Funded

Objective: The purpose of this study is to measure provincial spending for mental health services in fiscal year (FY) 2013 and to compare these cost estimates to those of FY 2003. Methods: This study estimated the costs of publicly funded provincial mental health services in FY 2013 and compared them to the estimates for FY 2003 from a previously published report. Our data were obtained from publicly accessible databases. The cross-year cost comparisons for provincial mental health services were restricted to general and psychiatric hospital inpatients, clinical payments to physicians and psychologists, and prescribed psychotropic medications. Total public expenditures were inflation adjusted and expressed per capita and as a percentage of the total provincial health spending. Results: Total public spending for mental health and addiction programs/services was estimated to be $6.75 billion for FY 2013. The largest component of the expenditures was hospital inpatient services ($4.02 billion, 59.6%), followed by clinical payments to physicians or psychologists ($1.69 billion, 25%), and then publicly funded prescribed psychotherapeutic medications ($1.04 billion, 15.4%). Nationally, the portion of total public spending on health that was spent on mental health decreased from FY 2003 to FY 2013 from 5.4% to 4.9%. Conclusion: Our results reveal that mental health spending, as a proportion of public health care expenditures, decreased in the decade from FY 2003 to FY 2013. Due to large differences in how the provinces report community mental health services, we still lack a comprehensive picture of the mental health system.

scholarly journals Despesas públicas e o nível de desenvolvimento humano dos estados brasileiros: uma análise do IDHM 2000 e 2010

2018 ◽  
Vol 17 (1) ◽  
pp. 29-54
Author(s):  
Taíse Fatima Mattei ◽  
Fernanda Mendes Bezerra ◽  
Gilmar Ribeiro de Mello
Keyword(s):  
Human Development ◽  
Public Expenditure ◽  
Least Squares Method ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Public Expenditures ◽  
Positive Contribution ◽  
Development Level ◽  
Per Capita ◽  
Ordinary Least Squares Method

Resumo: Uma das formas de um governo atuar na economia é na alocação dos gastos públicos. Os gastos públicos têm o objetivo de contribuir para o fornecimento de serviços públicos para a população, e também para a geração de investimentos na economia. Muitas vezes, questiona-se se esses gastos podem, de fato, contribuir para a melhoraria da vida das pessoas. Dessa forma, entender se as despesas públicas têm relação com o nível de desenvolvimento humano é importante para a tomada de decisão dos governantes e para melhorar a gestão dos gastos públicos, principalmente para direcionar em quais áreas devem ser gastos os recursos. Diante disso, o objetivo com este artigo foi verificar qual a contribuição das despesas públicas per capita por funções para o nível de desenvolvimento humano dos estados brasileiros. O método adotado é a regressão múltipla estimada pelo método de mínimos quadrados ordinários utilizando dados em painel. Os dados são provenientes do IBGE, PNUD e IPEA DATA. Os resultados sugerem que algumas despesas possuem contribuição positiva para o desenvolvimento dos estados. Analisando o modelo com todas as despesas na mesma regressão, saúde e educação apresentaram relação positiva para aumentar o IDHM. Analisando os modelos em regressões isoladas, as despesas com assistência e previdência, educação, saúde e segurança e transporte confirmaram impacto positivo sobre o nível de desenvolvimento dos estados. Destaca-se a importância das despesas com saúde e educação, as quais se apresentaram influenciáveis no desenvolvimento nas duas abordagens realizadas.Palavras-chave: Despesas Públicas. Índice de Desenvolvimento Humano. Estados brasileiros. Public expenditure and human development level of Brazilian states: an analysis of IDHM 2000 and 2010 Abstract: One of the ways for a government to act in the economy is in the allocation of public expenditures. Public expenditures aim to contribute to the provision of public services to the population, as well as to the generation of investments in the economy. It is often questioned whether such expenditures can actually contribute to the improvement of people's lives. Thus, understanding whether public expenditures arerelated to the level of human development is important for government decision-making, and to improve the management of public expenditures, mainly to target the areas in which resources should be spent. Therefore, the objective of this article is to verify the contribution of public expenditure per capita by functions to the level of human development of the Brazilian states. The method adopted is the multiple regression estimated by the ordinary least squares method using panel data. The data comes from IBGE, UNDP and IPEA DATA. The results suggest that some expenses have a positive contribution to the development of the states. Analyzing the model with all expenses in the same regression, health and education presented positive relation to increase the HDI. Analyzing the models in isolated regressions, assistance and pension, education, health, safety and transportation expenses confirmed a positive impact on the level of development of the states. It is important to highlight the importance of health and education expenditures, which were influential in the development of the two approaches.Keywords: Public Expenditure. Human Development Index. Brazilian states.

scholarly journals Reality and Contemporary Economic Classification of Expenditures of Public Institutions in Romania

2010 ◽  
Author(s):  
Carolina Soroceanu
Keyword(s):  
Public Spending ◽  
Public Institutions ◽  
Public Institution ◽  
Management Tool ◽  
Public Expenditures ◽  
Topical Issue ◽  
Large Space ◽  
Changing Economy ◽  
Insight Into

In our daily existence, troubled and changing, economy occupies a large space. Increasingly, more economic concepts such as public budget and public expenditures enter within our daily language. Increasingly, we are assailed with data information about the sustainability of expenditure, about how and when budget allows us to make certain expenditures. Thus, an insight into the functional mechanism and a public institutional budget is always a topical issue. About the budget, as a financial and management tool of a public, we can not discuss without reference to economic classifiers public spending. Budget public institution acquires through economic classification of expenditure substance and reality.

scholarly journals Reallocating Public Spending to Reduce Income Inequality

2019 ◽  
Vol 2019 (188) ◽  
Author(s):  
Djeneba Doumbia ◽  
Tidiane Kinda
Keyword(s):  
Income Inequality ◽  
Social Protection ◽  
Emerging Market ◽  
Public Spending ◽  
Health Spending ◽  
Defense Spending ◽  
Education Spending ◽  
Weak Institutions ◽  
Long Term Impact

Can a government reduce income inequality by changing the composition of public spending while keeping the total level of expenditure fixed? Using newly assembled data on spending composition for 83 countries across all income groups, this paper shows that reallocating spending toward social protection and infrastructure is associated with reduced income inequality, particularly when it is financed through cuts in defense spending. However, the political and security situation matters. The analysis does not find evidence that lowering defense spending to finance infrastructure and social outlays improves income distribution in countries with weak institutions and at higher risk of conflict. Reallocating social protection and infrastructure spending towards other types of spending tends to increase income inequality. Accounting for the long-term impact of health spending, and particularly education spending, helps to better capture the equalizing effects of these expenditures. The paper includes a discussion of the implications of the findings for Indonesia, a major emerging market where income inequality is at the center of policy issues.

scholarly journals Effect of macroeconomic variables on systemic risk: Evidence from Vietnamese economy

2021 ◽  
Vol 10 (3) ◽  
pp. 217-228
Author(s):  
Thi Xuan Huong Tram ◽  
Nguyen Thi Thanh Hoai
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Interest Rate ◽  
Interest Rates ◽  
Systemic Risk ◽  
Fixed Effects ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Ordinary Least Squares

This paper aims to find out the relationship between systemic risk in Vietnam and the effects of macroeconomic factors, including exchange rate, interest rates, and economic growth. We collect data from the Vietnamese stock market, specifically 29 listed financial firms (banks, insurance companies, and securities firms) for the period 2010-2018. The analysis is performed in two steps including systematic risk measurement in Vietnam based on the Systemic Expected Shortfall (SES) method and providing evidence from analysis related to the risk determinants assessment. Besides ordinary least squares (OLS) methods, we make use of fixed-effects (FEM) estimations, random-effects (REM) estimations, and system generalized method of moments (SGMM). The empirical evidence in this paper indicates that economic growth has a negative relationship on systemic risk in Vietnam while the exchange rate has a positive impact on systemic risk, and the interest rate has a negative relationship on systemic risk in Vietnam. Future studies can address the effects of interest rate on systemic risk during this period.

scholarly journals The impact of credit risk and macroeconomic factors on profitability: the case of the ASEAN banks

2020 ◽  
Vol 15 (1) ◽  
pp. 21-29
Author(s):  
Myra V. De Leon
Keyword(s):  
Credit Risk ◽  
Fixed Effects ◽  
Inflation Rate ◽  
Ordinary Least Squares ◽  
Gdp Growth ◽  
Fixed Effects Model ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Level Of Significance ◽  
The Impact

This study investigates the effect of credit risk and macroeconomic factors on profitability of 20 ASEAN banks, particularly from Indonesia, Malaysia, Thailand and Philippines, covering the period of 2012 to 2017. The unbalanced panel data were tested for heteroscedasticity and normality. A fixed effects model and a random effects model were utilized followed by simple ordinary least squares (OLS) regression. The obtained results show that credit risk and GDP growth negatively affect Return on Equity (ROE) at 5% level of significance. The inflation rate increases ROE by 0.323%. In terms of influence, inflation has the highest impact on ROE followed by GDP growth and credit risk. Credit risk and GDP growth negatively affect Return on Assets (ROA) at 5% level of significance. ROA was also influenced by an increase in inflation rate. Therefore, this study will help banks and bank managers, depositors, investors, policy makers and governments to identify factors affecting bank profitability.

scholarly journals Determinants of Off-Balance Sheet Business in the Case of GCC Banking Sectors

2012 ◽  
Author(s):  
Mohammad Elian
Keyword(s):  
Business Cycles ◽  
Fixed Effects ◽  
Positive Impact ◽  
Balance Sheet ◽  
Gulf Cooperation Council ◽  
Market Discipline ◽  
Gdp Growth ◽  
Variable Model ◽  
Dummy Variable ◽  
Real Gdp

This paper identifies the association between off balance sheet businesses and a number of determinants identified for the banking sectors of the Gulf Cooperation Council countries. The Fixed Effects Least Squares Dummy Variable Model is used to identify the determinants for a large sample of 64 banks over a recent fifteen-year period. The results reveal that bank-specific variables have important roles in influencing off balance businesses. As for the regulatory variable, capital items are less important, which is contrary to the long-held market discipline hypothesis, under which secure banks are predisposed to engage in more off balance businesses. The macroeconomic variable reveals that higher real GDP growth does not necessarily cause an increase in the off balance activities. However, its positive impact indicates that the off balance business actions follow business cycles, and the overall growth of economy. Prudential regulators, as a policy matter, need to consider region-wide implications of these findings. This is important given the fact that regulating how off balance business is conducted in the region would influence costs and the scope of banks, hence also the monetary policy.  

scholarly journals Real GDP growth rates and health care spending – Comparison between the G7 and the EM7 countries

2020 ◽  
Author(s):  
Mihajlo Jakovljevic ◽  
Yuriy Timofeyev ◽  
Chhabi Ranabhat ◽  
Paula Odete Fernandes ◽  
João Teixeira ◽  
...  
Keyword(s):  
Emerging Markets ◽  
Growth Rates ◽  
Health Expenditure ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Health Spending ◽  
Gdp Growth ◽  
Unemployment Rates ◽  
Real Gdp ◽  
Per Capita

Abstract Background: Accelerated globalization has substantially contributed to the rise of emerging markets worldwide. The G7 and Emerging Markets Seven (EM7) behaved in significantly different macroeconomic ways before, during, and after the 2008 Global Financial Crisis. Average real GDP growth rates remained substantially higher among the EM7, while unemployment rates changed their patterns after the crisis. Worldwide economic growth began to accelerate again, starting from year 2017. However, approximately one half of this growth is attributable to the EM7, while only a quarter to the G7 nations. This paper aims to analyse the association between the health spending and real GDP growth in the G7 and the EM7 countries.Results: In terms of GDP growth, the EM7 exhibited higher degree of resilience during the 2008 Global Crisis, compared to the G7. Unemployment in the G7 nations was rising significantly, compared to pre-recession levels, but, in the EM7, it remained traditionally high. In the G7, the austerity (measured as a percentage of GPD and in PPP basis) significantly decreased the public health expenditure, even so in than in the EM7. Out-of-pocket health expenditure grew at far more concerning pace in the EM7 compared to the G7 during the Crisis, exposing vulnerability of citizens and households living close to poverty line. Regression analysis demonstrated that, in the G7, real GDP growth had positive impact on out-of-pocket expenditure measured as a percentage of current health expenditure expressed as a percentage of GDP (CHE). In the EM7, it affected negatively CHE, CHE per capita in PPP in constant 2011 international USD, and out-of-pocket expenditure per capita in PPP international USD. Conclusion: The EM7 countries showed stronger endurance withstanding the consequences of the global economic crisis as compared to the G7 economies. Evidence of that were most visible in real growth rates and unemployment rates, before, during, and after the crisis. It influenced health spending patterns in both groups, although they tended to diverge instead of converging in several important areas.

scholarly journals Fiscal Rule in Africa

2020 ◽  
Vol 3 (1) ◽  
pp. 112-120
Author(s):  
Olatunji Abdul Shobande
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Positive Impact ◽  
Private Investment ◽  
Gdp Growth ◽  
Method Of Moment ◽  
African Countries ◽  
Public And Private ◽  
Public Investments ◽  
Private And Public

AbstractFiscal policy has recently been encouraged to increase competition, monitor Africa’s debt to GDP and improve its economic growth. Importantly, the present fiscal situation in most African countries will seem to have significant consequences for both public and private investments. This paper examines whether fiscal policy and investment matters for GDP growth in a panel of forty-eight (48) African countries for the period 1970-2017. The empirical evidence explored is based on the Fixed Effect (FE) and System Generalised Method of Moment (GMM) estimators. The results suggest that public and private investment among selected African countries has a positive impact on GDP growth. The findings further indicate that fiscal policies must play a more prominent role in sustaining potential private and public investments, especially as debt servicing among the African’ countries examined may have serious shortcomings on sustainable economic growth

scholarly journals assessment of the Effectiveness of Mechanisms for Strengthening the State Sovereignty of Russia

2018 ◽  
Vol 22 (5) ◽  
pp. 6-26
Author(s):  
V.  L.  Makarov ◽  
A.  R. Bakhtizin ◽  
B.  R.  Khabriev
Keyword(s):  
Tax Evasion ◽  
Quantitative Assessment ◽  
Social Protection ◽  
Positive Impact ◽  
Initial Period ◽  
Growth Potential ◽  
Gdp Growth ◽  
Cge Models ◽  
Percentage Points ◽  
Model Complex

In this article, the authors present a quantitative assessment of the consequences of a number of government decisions aimed at achieving accelerated economic growth, namely: 1) diversifcation of the economy; 2) reduction of the differentiation of regions; 3) increase of social protection of the population; 4) stimulation of the domestic demand. The authors used for calculations the modifed model complex developed in CEMI RAS. The complex includes a set of Computable General Equilibrium models (CGE models) and Agent-Based Models (ABMs). The author’s calculations showed, as compared with other industries, that the increase in fnancing of the sectors of the new economy leads for 7 years to the growth of GDP by 4.45 percentage points in relation to the basic version of the economy. We also established that due to tax preferences and differentiated investment policy in relation to the “problem” regions, it is possible to equalize the level of development of the subjects of the Russian Federation. The authors conclude that the process of inter-regional smoothing is time-consuming and a signifcant effect is possible after fve years from the beginning of the implementation of the relevant mechanisms. The results of the calculations showed that the increase in benefts as a whole leads to GDP growth and has a positive impact on the economic system. We also concluded that the reduction of the refnancing rate leads to an increase in GDP and lower inflation. With the help of the model complex, we calculated the influence of a number of illegal fnancial transactions on the main macro indicators. Quantitative assessment was carried out in three scenarios: 1) withdrawal of budget funds; 2) tax evasion by individuals and legal entities; 3) withdrawal of fnancial assets abroad. The unrealized GDP growth potential for the six years compared to the initial period was 11.107, 21.323, and 31.976 percentage points for the three scenarios, respectively. The calculations also show that almost any cash infusion into the real sector of the economy leads to GDP growth due to signifcant demonetization of the Russian economy.

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