Budget Constraint and Economic Growth – A Systematic Review of the Evidence



Year of publication 2017
Type Article in Proceedings
Conference 7th International Scientific Conference TAXES IN THE WORLD
MU Faculty or unit

Faculty of Economics and Administration

Keywords Budget Constraint; Economic Growth; Fiscal Policy; OECD; Replication.
Description There have been many empirical studies concerning budget policy or fiscal policy and its repercussion on the economic growth. Many of these studies originated from the study of Kneller et al. (1999), who used the budget constraint as a methodological instrument to measure impacts of budget variables on the long-term economic growth. This paper focuses on his results and tries to replicate his findings with an updated dataset covering the period of 1995-2015 from the same 22 OECD countries. Empirical results confirmed several findings in the original study but there are also several discrepancies, mainly concerning the revenues side of a budget and the whole specification setting of the original study.
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