GSGM · Composition of government expenditure and economic growth
6РП — Действия „Мария Кюри“
- Период
- 2005-10-01 → 2007-09-30
- Финансиране от ЕС
- 80 000 €
- Участници
- 1
- Схема
- EIF
Линиите свързват координатора с партньорите.
Накратко на български
Разпределението на държавните разходи за физически капитал (инфраструктура) и човешки капитал (образование и здраве) влияе върху икономическия растеж. Анализът помага на правителствата да оценят ефективността на своите политики и разпределянето на европейските структурни фондове.
Кратко обяснение, генерирано от езиков модел по текста на CORDIS. Оригиналът е по-долу.
Резултати накратко
Final Activity Report Summary - GSGM (Composition of government expenditure and economic growth)
We developed a two-sector model of physical and human capital accumulation, in which the government may allocate resources to both sectors, thereby enhancing productivity. One consequence of this is that unlike the traditional two sector growth model the dynamics of the system do not decouple; equilibrium prices and quantities are jointly determined. We analyse the impact of both the level of government spending and its composition on growth and welfare, and derive their respective growth-maximising levels. We show that at the growth-maximising composition, an increase in the fraction of government spending allocated to final output will reduce steady-state welfare, implying that the welfare maximising share of productive government expenditure is smaller than the growth-maximising share. The opposite occurs in the case of the tax rate. Finally, we supplement our theoretical analysis with simulations, both of the steady-state responses, but also of the transition dynamics following an increase in productivity. With the aim of helping governments evaluate the impact of their policies, the goal for year two was to o estimate the theoretical model developed in stage one. This would allow us to estimate the returns on public and human capital. This is clearly a relevant issue, playing a key role not only to the European debate of real convergence, but also to the debate on how to classify public investment in the context of the stability and growth pact. Since the European structural funds aim at co-financing a series of government programs concerning not only public investment in infrastructures (e.g. airports, harbours, railways, roads or public sector R&D), but also human capital formation (education or health); it is relevant to provide a qualitative as well as a quantitative measure of the impact of both types of spending on the growth performance of receiving economies.
Текст от CORDIS, на английски · Данни: CORDIS, © Европейски съюз
Цел на проекта
Most studies on growth emphasize that increasing human capital is critical for explaining economic growth. There is a wide consensus that education plays a key role in creating human capital, and since the government is responsible for the majority of investments in education, one can relate the accumulation of human capital to government spending.At the same time, given the limited amount of resources available to the government, many countries face important tradeoffs between education and investment in infrastructures. The aim of this research is twofold. First, we develop a model of economic growth to explore the possibility that government expenditure can enhance economic productivity in two alternative ways: raising the productivity of physical capital or by raising the productivity of human capital. An essential feature of our analysis is the introduction of government spending in the process of human capital accumulation, which is widely accepted but generally ignored. Second, we estimate the theoretical model developed in stage one.The goal is to get an estimate for the returns on public and human capital, thus helping governments evaluate the impact of their policies. The issues raised by this research are central not only to the European debate of real convergence, but also to the debate on how to classify public investment in the context of the Stability and Growth Pact (SGP). In the first case, the European structural funds aim at co-financing a series of government programs concerning not only in vestment in infrastructures, but also human capital. In the second case there is the issue of the deficit constraints specified in the SGP. Therefore, it is relevant to provide a qualitative as well as a quantitative measure of the impact of both types of spending on the growth performance of the receiving economies.
Оригинален текст от CORDIS (на английски).
Участници
- UNIVERSITY OF YORK · YORKКоординаторОбединеното кралство
Връзки
Данни: CORDIS, © Европейски съюз