Using panel data from 1995 to 2011 for 34 OECD countries, we examine the effects of government consumption spending, public social spending, and public investment on economic growth. We use a generalized method of moments estimation technique to solve inconsistency problems with fixed effects and random effects panel estimation. We find that an increase in public social spending has a significant negative effect on subsequent economic growth. Government consumption spending and public investment have no significant effect on subsequent economic growth.
- economic growth
- generalized method of moments
- government consumption spending
- public social spending
ASJC Scopus subject areas
- Business and International Management
- Economics, Econometrics and Finance(all)