Theoretical and Applied Economics
No. 2 / 2021 (627), Summer
Public expenditure and economic development: New evidence from the BRICS-SAARC-ASEAN region
University of Hyderabad, India
Faraz KHAN
Aligarh Muslim University, UP. India
Manish Kumar SINGH
Banaras Hindu University, India
Abstract. Regardless of theoretical backgrounds that assumed a positive association between public expenditure and economic development, the present study on this linkage is inconclusive. This empirical work re-investigates the effect of government expenditure on GDP growth employing more recent dataset spanning the period 1991-2019 in the region of Brazil, Russia, India, China, South Africa (BRICS), Association of South East Asian Nations (ASEAN), and South Asian Association for Regional Cooperation (SAARC). Considering the issues of cross sectional dependence, the estimated findings show long run relationship between government size, inflation, human capital, employment, unemployment, export, and economic growth. The fully modified OLS estimates reveal that government spending has a positive influence on economic development. Further, the analysis indicates that human capital, employment, and export increases economic growth. However, unemployment and inflation have a detrimental effect on economic development. Our result confirms the unidirectional causality between public spending and economic growth, suggesting Keynesian view of public spending in stimulating economic development. The sensitivity of the results have been checked with the help of dynamic OLS estimator.
Contents
The impact of non-banking financial markets on economic development
The effect of financial liberalization on Malaysian economic growth
Causal relationship between agricultural exports and economic growth: a diagnostic approach
COVID-19 and CAPM: a tale of reference dependence with the pharma stocks’ returns
Statistical analysis on population ageing
An impulse response function analysis of the impact of modern payment technologies on money demand in Nigeria
Statistical analysis on the evolution of economic activity in Romania
Determinants of trade flows to Agadir Agreement countries: gravity model three-way approach
Case study: The impact on the Romanian State Budget in the case of EU adoption of the CCCTB Directive
Public expenditure and economic development: New evidence from the BRICS-SAARC-ASEAN region
The external debt burden and economic growth in Africa: a panel data analysis
What explains the real exchange rate movement for the BRICS nations? With a separate analysis for Indian economy
Export supporting strategy, distance to frontier and economic growth
Volatility Forecasting, Market Efficiency and Effect of Recession of SRI Indices
The impact of taxation on growth: the case of Greece