engleski

The impact of public expenditures on economic growth in the post transition countries of the European Union - panel data analysis

The endogenous growth models (Lucas and Romer) represent the theoretical basis for the study of the impact of fiscal policy on economic growth. Using their findings, Barro has created a model explaining how fiscal policy can affect the rate of GDP growth. In defining this impact he uses: productive and unproductive expenditures, and distortionary and non-distortionary taxation. The findings on the impact of fiscal policy on economic growth vary depending on the sample of countries, the period under investigation, the methods of analysis used as well as the used fiscal variables. Recent research using panel data shows that the impact of fiscal policy on economic growth is significant, but the direction of this influence is often ambiguous. Therefore, the main goal of this study is to determine the direction and intensity of the impact of public expenditures on economic growth in the post-transition countries of the EU. In order to achieve this goal, an empirical model is estimated using dynamic panel analysis on a sample of eleven countries. Empirical analysis identifies the capital expenditure (public investment) and expenditure on education as productive public expenditures.

fiscal policy, economic growth, public expenditures, productive expenditures, unproductive expenditures, panel analysis

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