This paper investigates the effects of government spending in the Euro area where the fixed exchange rate regimes have been maintained. I employ the Bayesian pooling method which has been used to analyze the effect of monetary policy. By applying the Bayesian estimation procedure to the panel of VARs in the Euro area, I explore whether there exists heterogeneity in country dynamics or not, i.e....

This study examines the role of human capital formation in economic growth in Pakistan by using the secondary data for the period of 197273 to 2010-11. The results implied that education enrollment (proxy for human capital), health and physical capital are important to boost the economic growth in Pakistan. Human capital, fixed capital and employed labor force affect the GDP and result in unidi...

In developing countries, the experiences of government-led development through heavy loans and grants from international donors have added to records of failure because of centralized system of plan formulation and its implementation through complex bureaucratic structure of government agencies. Realizing the inevitability of active participation of the local communities, the international dono...

Most policymakers and economists agree that the quality of a nation’s human capital stock is a chief determinant of economic growth. However, public spending on education also has serious implications for the future distribution of resources in society. This study examines how these distributional concerns are realized in the arena of party politics. Three key questions are explored. Firstly, w...

T he purpose of this paper is to summarize the burgeoning literature concerning the relationship between public services, or at least government spending, and economic development in the jurisdiction providing those services, as measured by changes in population, employment, income, or the number of firms. Much of this work, particularly the initial studies, arose as a reaction to research exam...

Increasing fiscal deficits raise the possibility that many advanced economies will reach a state at which taxes and spending can no longer adjust to stabilize debt, which eventually leads governments to implement “unpleasant” fiscal austerity measures. In this paper, we study the macroeconomic and welfare effects of reducing government debt. We formulate a dynamic general equilibrium, overlappi...

Economic and rent-seeking outcomes are determined jointly in a dynamic general equilibrium model of corruption, public spending and growth. In an economy with government intervention and capital accumulation, state-appointed bureaucrats are responsible for providing public goods, which contribute to productive efficiency. Corruption arises because of an opportunity for bureaucrats to appropriat...