The Impact of Subnational Fiscal Policies on Economic Growth: A Dynamic Analysis Approach

Srithongrung, Arwiphawee; Kriz, Kenneth A.

doi:10.1002/pam.21784

Cited by 21 publications

(13 citation statements)

References 29 publications

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“…Investors would be discouraged by high interest rates and accumulate less capital which would upshot into low economic growth. Some authors have found a direct link between investment and economic growth (Romp & De Haan, 2005;Shrithongrung & Kriz, 2014). Baseerit (2005) posited that the earlier stage of borrowing is normally marked with enhanced growth resulting from modest debt level.…”

Section: Unit Root Test and Ardl Resultsmentioning

confidence: 99%

Can public debt stimulate public investment and economic growth in South Africa?

Ncanywa

Masoga

2018

Cogent Economics & Finance

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Sharecopy and redistribute the material in any medium or format. Adaptremix, transform, and build upon the material for any purpose, even commercially. The licensor cannot revoke these freedoms as long as you follow the license terms. Under the following terms: Attribution-You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. No additional restrictions You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

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Section: Unit Root Test and Ardl Resultsmentioning

confidence: 99%

Can public debt stimulate public investment and economic growth in South Africa?

Ncanywa

Masoga

2018

Cogent Economics & Finance

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“…There is lot of financial analysis left to do here (see Clair 2012;Hendrick and Crawford 2014;Marlowe 2012;Srithongrung and Kriz 2014). We have merely scratched the surface.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Is a Good Normative Model of Public Spending Run Backward a Good Positive Model?

Thompson¹,

Pierson²,

Hand³

et al. 2016

Public Budgeting & Finance

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We test a positive model of government spending and savings, where jurisdictions seek to stabilize spending growth and where revenue growth and savings are assumed to be continuous‐time stochastic processes, the Dothan–Thompson optimal budget model. Our empirical tests address two reduced‐form specifications derived from this model, each applied to two different subsets of municipalities. For each of the two specifications, we first estimated models using data for all available municipalities (more than 20,000) covered by the U.S. Census government finance data, and then tested them again on a much smaller balanced subset of the full panel. We find that municipalities do not, on average, optimally stabilize spending in the face of revenue volatility, nor do they consistently use savings to do so. There is, however, at least modest statistical evidence that savings reflect revenue volatility at typical levels of volatility. For all model specifications tested, the single greatest determinant of savings at the municipal level is the state in which the municipality is located. The next challenge is to identify and measure the impact of the underlying factors that explain the dramatic state‐to‐state differences observed in municipal savings patterns.

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“…Sánchez-Juárez and García [31] found with data of the Mexican economy for the period 2003-2011 that the relationship between production and public investment made by sub-national governments of the northern border is negative, which they attributed to the effect of displacement of private investment or that had a short temporary sample (on this last point, see the work of Castillo and Garcia [32]). Shrithongrung and Kriz [33] show with sub-national data of the American economy and the method of Panel Vector Autoregression, that public capital has a positive effect on growth in the short and the medium term. On the other hand, Shrithongrung and Sánchez-Juárez [9], with data of sub-national governments of Mexico, confirm that public investment has positive effects on the production in both the short and the long term.…”

Section: (3)mentioning

confidence: 99%

Public Debt, Public Investment and Economic Growth in Mexico

Juárez¹,

García-Almada²

2016

IJFS

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Abstract:The primary objective of this article is to answer the following two research questions: has the growing public debt of state governments promoted increased public investment? If the answer is yes, then does any increase in public investment lead to more growth in the Mexican states? Dynamic Models of panel data and the Generalized Method of Moments, with information for 32 states from 1993 to 2012, were used for this purpose. The econometric results confirmed that public debt is positively correlated with public investment and that this in turn generates economic growth. This does not mean that a good economic policy strategy has been followed, since the marginal positive impact of public investment, and therefore the public debt on the production per person, is reduced (1% increase in the interaction between public investment and public debt variable causes a 0.0005% increase in economic growth). This suggests deviations from the debt contracted for purposes other than production, which could lead to a situation of unsustainability of state public finances in the medium term.

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The Impact of Subnational Fiscal Policies on Economic Growth: A Dynamic Analysis Approach

Abstract: Abstract

Cited by 21 publications

References 29 publications

Can public debt stimulate public investment and economic growth in South Africa?

Can public debt stimulate public investment and economic growth in South Africa?

Is a Good Normative Model of Public Spending Run Backward a Good Positive Model?

Public Debt, Public Investment and Economic Growth in Mexico

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