International Journal of Business and Economics Volume 8, No. 2 August, 2009

Public Spending and the Macroeconomy: Evidence from Developing and Developed Countries

Magda Kandil

International Monetary Fund, Western Hemisphere Department, U.S.A.

Abstract

Using annual data, this paper studies the time series evidence regarding the effectiveness of government spending. Crowding out appears more prevalent in the face of variation in government spending in advanced countries. Private consumption and inflation vary more closely with government spending in developing countries.

Keywords：fiscal stimulus, crowding out, supply constraints, developing and advanced countries.

JEL Classifications：E21, E32, E61, E62, E63.

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