This study analyzes the existence of a complementary relationship between public and private spending on Research and Development activities. The results show that public funding does not produce a substitution effect on private spending. In fact, depending on the methodology used, public subsidies actually produce a crowding in effect of up to 49% on private spending. JEL: C23; L11;

We present a model in which a conservative incumbent with preferences for low public spending can strategically run a budget deficit to prevent the left-wing opposition candidate from choosing high public spending if elected, and possibly also to ensure his own reelection. We find that the incumbent never manipulates the opposition candidate’s public spending if he can ensure his reelection; an...

This paper proposes a generalized WS/PS model studying the impact of public spending on employment, in the presence of imperfect competition in labour and product markets. Public spending is shown to a¤ect …rms pro…t margins and …rms labour demand schedules. The model highlights a new channel by which …scal policy can improve employment. By reducing …rms’mark-up, public spending helps counterin...

I develop a novel link between frictions in international financial markets and fiscal procyclicality. Complementing existing evidence, A decomposition of government expenditure into social spending and public good spending reveals that the cyclical correlation of social spending exhibits the biggest differences across countries. I build a small open economy model with income inequality, endoge...

BACKGROUND Many OECD countries have replied to economic recessions with an adaption in public spending on social benefits for families and young people in need. So far, no study has examined the impact of public social spending during the recent economic recession on health, and social inequalities in health among young people. This study investigates whether an increase in public spending rela...

BACKGROUND In this article, we attempt to address a persistent question in the health policy literature: Does more public health spending buy better health? This is a difficult question to answer due to unobserved differences in public health across regions as well as the potential for an endogenous relationship between public health spending and public health outcomes. METHODS We take advant...

Curbing the growth in public spending and raising its effectiveness... Public spending rose steadily as a share of GDP in the three decades to the mid1990s, but this trend has since abated. The spending pressures stemming from the continued expansion of social programmes have been partly compensated by transient or one-off factors. Pressures on public spending, however, appear likely to intensi...

This paper develops an infinite horizon model of public spending and taxation in which policy decisions are determined by legislative bargaining. The policy space incorporates both productive and distributive public spending and distortionary taxation. The productive spending is investing in a public good that benefits all citizens (e.g., national defense or air quality) and the distributive sp...

We analyze the conduct of fiscal policy in a financially integrated union presence financial frictions. Frictions create wedge between return to investment and interest rate. This leads an over-spending externality. While social cost spending is investment, governments care mostly about (depressed) rate they face. In other words, crowding-out effects public are partly “exported” rest union. arg...

The analysis begins by using annual data for the US from 1959 to 2003 to examine the macroeconomic relationship between government expenditure on public order and safety, output and investment. In practice, total spending on public order and safety is divided up into four categories (police force, fire service, law courts and prison service) so in the second part of the analysis we test for Gra...