Growth Effects of Fiscal Policies A Comparative Analysis in a Multi-Country Context

The potential interactions among fiscal policies, investments and economic growth are complex and manifold. In this paper, we will perform a systematic comparative analysis of the various economic insights that are currently available on these complex relationships, both theoretically (by a selective literature review) and empirically (by investigating available data from various countries). Despite the wide variety of potential theoretical relationships between government expenditures, taxation and growth, most empirical analyses are restricted to simple linear regressions of growth on some measure of government expenditures. Based on empirical experiments, we will indicate directions for future empirical research that may enrich our knowledge on the complex relationship between fiscal policies and economic growth, not only nationally but also regionally.