Spending In GDP Research Articles

Determinants of Kuwait long‐run and short‐run economic growth

AbstractThis paper examined the relationship between growth and its demand side determinants in Kuwait from 1970 to 2020. A set of autoregressive distributed lag models were applied to estimate the long‐ and short‐run relationships between economic growth and its determinants. The results suggest that exports, gross fixed capital formation (investment), imports and household spending exhibit a long‐run relationship with economic growth. While exports, gross fixed capital formation, share of government spending in GDP and household spending exhibit short‐run relationship with growth. Moreover, the results suggest that long‐ and short‐run economic growth in Kuwait is mainly driven by exports and to a lesser extent household spending. As Kuwaiti exports are dominated by oil exports and oil production is limited to the organisation of petroleum exporting countries quota this limits the policy makers from the most effective tool to stimulate growth. In this context Kuwait needs to enact policies to diversify exports, build a local industrial base, utilise imports to feed into non‐oil export sectors, direct investment spending to develop non‐oil industries and encourage FDI to facilitate innovation and technology transfers and spill overs to progress from a volatile oil‐based economy to a more diversified and sustainable growth path.

Optimal fiscal policy under monopolistic competition with firm heterogeneity

AbstractGovernment spending is a policy instrument used to sustain economic development and improve social welfare. Empirical observations, however, reveal a significant decrease in the government spending to GDP ratio for the United States. In addition, the United States has been observed to exhibit a rise in firm heterogeneity in productivity in recent decades. This paper shows that the optimal size of government expenditure will decrease as firm heterogeneity increases. We thus indicate that the rise in firm heterogeneity in productivity may serve as a plausible vehicle to explain the decline in the share of government spending in GDP for the United States.

New insights into the growth-maximizing size of government: evidence and implications for Turkey

This paper provides new insights into the growth-maximizing size of government in Turkey. Unlike previous studies that traditionally use the share of government spending in GDP as a proxy variable of government size, in this paper we consider a fairly large number of proxy variables ranging from the share of tax revenues in GDP to the share of public investment in total investment. After reviewing the potential non-linear relationship between government size and growth, we estimate various thresholds for government size that maximize growth. To this end, we use the threshold autoregressive model proposed by Hansen (1996: 413-430; 2000: 575-603)) and apply it to Turkey’s annual time-series data for the period from 1974 to 2019. Overall, we arrive at the following main result: Government size is non-linearly related to growth, confirming the existence of a growth-maximizing threshold for any measure of government size, beyond which growth tends to slow down as government size continues to increase. More precisely, the results show that the estimated thresholds for government size lie within the range of 4.28–15.19%, depending on the definition or proxy variable representing government size.

The Impact of Tax Structure on Economic Growth: New Empirical Evidence from Central and Eastern Europe

This study aims to provide new evidence of the impact of total tax revenue and tax structure on economic growth in a sample of eleven European Union (EU) member states located in Central and Eastern Europe (CEE), namely Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. The methods used are description, comparison, synthesis, regression and correlation analysis of annual panel data for the period 2000-2021. The ordinary least squares (OLS) method is used to estimate the parameters of the regression models. The causal relationship between the variables is confirmed by the Granger causality test. The main results indicate that there is a significant negative effect of total government spending on economic growth rate, while the total tax revenue has a positive impact. These findings suggest low efficiency of public spending. The structure of tax systems does not seem to hinder economic growth, as both direct and indirect tax revenues show a positive growth-supporting effect. Only social security contributions are estimated to have a detrimental impact on economic growth. Value added tax and both income taxes (personal and corporate) are found to be growth-conductive, while property taxes and excise duties seem to have no significant impact on the growth rate. Based on the research findings it is obvious that government expenditure is not an effective tool for positive fiscal impact on the economy, so policymakers can support economic growth by decreasing the share of public spending in GDP or by increasing its efficiency. It is recommended to maintain the current ratio between direct and indirect tax revenue, while carefully considering changes to social security systems to promote sustainable and inclusive growth.

Algeria: A three‐sector macrofiscal model for debt sustainability and growth policy analysis

AbstractIn this paper, we present a dynamic general equilibrium (DGE) model to address the macrofiscal vulnerabilities and the effects of fiscal policy on growth and employment in Algeria. We first discuss the baseline scenario over the period 2021–2040. According to our baseline results, without fundamental changes in fiscal policies, even relatively high growth will not be sufficient to put public debt on a sustainable path. We then conduct four experiments and assess their impact on fiscal accounts, growth, and unemployment: an increase in the efficiency of public spending on infrastructure investment, a gradual reduction in the share of noninterest government spending in GDP, the same gradual reduction in spending combined with a permanent increase in the share of investment in infrastructure in total noninterest government expenditure, and a composite fiscal reform program that combines these individual policies, respectively. The results suggest that public debt sustainability can be achieved, and growth and employment can be promoted, as long as an ambitious fiscal reform program involving tax, spending, and governance reforms is implemented. Importantly, our quantitative analysis shows that, with a well‐designed fiscal program, there may be no trade‐off between fiscal consolidation and economic growth.

ТЕНДЕНЦИИ РАЗВИТИЯ ЗДРАВООХРАНЕНИЯ РОССИИ

The article examines the indicators of the Russian healthcare system for the period 2005–2020. The purpose of the article is to identify trends in the development of the Russian healthcare system. In the course of the study, methods of analysis, comparison, regression, and correlation were used. Trends in a number of indicators of the Russian healthcare system have been identified: the share of government spending in GDP, provision of medical organizations and hospital beds, the number of medical personnel, etc. The conclusion is made about the need to change the trends in the development of the Russian healthcare system.

REGULATORY FRAMEWORK FOR THE IMPLEMENTATION OF SMART SPECIALIZATION IN THE REGIONS OF UKRAINE

The article is devoted to the analysis of the adequacy of the existing regulatory framework for the successful implementation of smart specialization in the regions of Ukraine. The work is justified the relevance of the study of the issues of regulatory and legal regulation of procedures for the implementation of smart specialization at the regional level in Ukraine. The scientific novelty of work is, firstly, in a reasonable analysis of the regulatory framework for the implementation of innovation activities in Ukraine with the determination of its effective impact on the country's position, which it occupies among the countries of the world on innovation activity, and, secondly, in the systematization of evaluation indicators of various aspects Implementing smart specialization projects with the addition of the existing system with new indicators.
 The chronology of formation in Ukraine has been established, since its independence, the system of regulatory and legislative regulation of innovative activities of business entities, as a key factor in the country's conclusion from the crisis state. The effectiveness of the existing regulatory framework for the intensification of innovative activities in Ukraine through the dynamics of the rating in Global Innovation Index and its place to the percentage of R & D spending in GDP and on the percentage of exporting high-tech goods in industrial exports among the countries of the world has been analyzed.
 The state of regulatory and legal and organizational support for the implementation of smart specialization in Ukraine was investigated. It was established that in Ukrainian regulatory acts there is only a statement of the need for the implementation of smart specialization in the territory of the regions of Ukraine. The state regulatory documents are proclaimed that Ukraine joins the implementation of the principles of smart specialization through S3 Platform, which is given the role of a methodological, information and coordinating center. The paper substantiates the feasibility of creating unified guidelines or guidelines in Ukraine, which would provide specific explanations on key aspects of the implementation of smart specialization projects, the list of which is specified in the work.
 The indicators are systematized, with the help of which a comprehensive quantitative and qualitative assessment of the degree of dissemination and effectiveness of smart specialization procedures at the regional level in the country are systematized. The feasibility of introducing new indicators of estimating the intensity of the implementation of smart specialization projects is substantiated.

Study on the Evolution of Defense Expenses in Nato Member States for the Period 2010–2020. “Free Rider” behavior among Allies

Abstract This paper proposes a longitudinal study on the analysis of defense spending of NATO member states in the years 2010-2020. It also aims to identify the emergence of a possible “free-rider” behavior among alliance members. This behavior occurs when some members may be tempted to allocate a low level of defense spending. Defense spending is an important component of each state’s budget, which ensures a vital function of states, namely the national defense function. When the defense is carried out in military-type alliances, and the number of members is large, there is an increased possibility of observing a “free-rider” type behavior between the members of the alliances. To observe this behavior, we tried to identify the best evaluation indicator, which according to the literature could be “the share of defense spending in GDP.” The paper is divided into five parts as follows: the first point considers the introductory part of the paper and the setting of objectives; the second chapter describes the study database, as well as the research methodology and methods used in the study to obtain the results; in the third chapter is analyzed the literature with impact on the studied subject; in the fourth chapter the case study is carried out; and in the last chapter mentioned the conclusions of the study.

DGE Model for Assessing Macro-Fiscal Vulnerabilities in Algeria

In this paper, we present a Dynamic General Equilibrium (DGE) model to address the macro-fiscal vulnerabilities and the effects of fiscal policy on growth and employment in Algeria. We first discuss a baseline scenario throughout the projection period, 2021-2040 and then conduct several experiments; an increase in the efficiency of public spending on infrastructure investment, a gradual reduction in the share of non-interest government spending in GDP, the same gradual reduction in spending with a permanent increase in the share of investment in infrastructure in total noninterest government expenditure, and a composite fiscal reform program, respectively. The results show that with a well-designed fiscal program, there may be no trade-off between fiscal consolidation and economic growth.

Security Environment and Military Spending of Turkey in the 2000s

A significant change in Turkey’s foreign policy came with an active engagement in regional issues that, in turn, produced more risks, new areas of interest, regional policy arrangements, and different security challenges in the 2000s. In this vein, Turkey’s military spending has increased to sustain its active policy behavior and goals, both regionally and globally. This article examines Turkey’s military spending between 2000 and 2018 by using Stockholm International Peace Research Institute’s (SIPRI) Military Expenditure Database and its effects on bilateral and regional relations. It argues that the increase in Turkey’s military spending in the 2000s can be explained not only by diversified security threats but also by the quest for autonomy, the desire to be a regional actor, economic capacity increase, efforts to nationalize the defense industry, and the North Atlantic Treaty Organization (NATO) alliance’s inability to form a sufficient umbrella time in the face of security threats, notably in the face of missile threats. The results show that the traditional alliances and strategic cooperation do not guarantee Turkey’s military demands, and its military spending increases, while the proportion of military spending in GDP falls, due to economic growth.

Defense Spending as a Determinant of Poland’s Military Strength

The purpose of the study is to analyze the level of Poland’s defense spending in the years 2008–2018, in the context of their impact on the military strength of the state. The research question of this study is whether the amount of defense spending included in the state budget is a determinant of Poland’s military strength. In accordance with the methodology adopted by NATO, the analysis includes the following aspects: total planned and executed defense spending, the share of defense spending in the state budget spending, the relation of defense spending to the GDP growth rate, and the share of defense spending in GDP. In analyzing Poland’s military strength, a world military strength ranking, Global Firepower, was used. The result of the research is that the most important factors that impact the military strength of individual state economies include the amount of budget spending incurred for the functioning and modernization of the armed forces.

Economic Growth and Defence Spending: An Efficiency Analysis of Romania’s Conscription Suspension

Abstract National defense is one of the key sectors responsible for maintaining national security, being considered at the same time an element of great importance and strict necessity of the public sector. The performance of defense functions and missions are closely linked to the military capabilities of this sector, which in turn depend on the budget for defense spending. This paper deals with some theoretical issues in the economic field of defense, regarding the size of defense spending in GDP and their social effects. It is also trying to carry out an analysis on the efficiency versus inefficiency in the use of defense resources, to finance the two types of recruitment systems, namely: by conscription or voluntary will. In order to be able to achieve the above, graphical analysis methods and calculation dermination method were used. The efficiency of spending public funds depends on both objective factors such as: distribution of a certain share of GDP to a certain area; attracting internal and external funding, as well as subjective factors, like: allocating resources to certain categories of expenses; allocating resources to certain defense programs; effective management of these resources by the competent structures. Therefore, for a program to be considered effective, it must meet the requirements of the collective needs of society, be rationally implemented and be sustainable.

Debt, Deficits and Defence: The UK Experience 1700-2016

ABSTRACT Military spending associated with wars has been a major cause of government deficits and debt financing. This paper looks at the association between debt and defence spending in the UK over the last three centuries. The paper reviews the history, discusses the theory and provides some estimates of the effect of variations in military expenditure on debt. The association tends to be quite close and the effect of the change in the share of military spending in GDP on the debt–GDP ratio is quite stable.

THEORETICAL BASIS OF BUDGETARY REFORM (IN THE CONTEXT OF THE UKRAINIAN REALITIES)

Introduction. Budget reform is a form of solving the problems that have accumulated in the budgetary system of Ukraine in the course of its development. Problem. For successful budget reform, it is very important to clearly outline its theoretical basis within the framework of a more general theory - public finance, which is developing in the context of the main areas of economic theory. Purpose: to consider (according to the main areas of economic theory) the provisions of the theory of public finances, as well as special theoretical approaches to budgeting and reforming the budget system, which, based on the realities of today, can form the theoretical basis of budget reform in Ukraine. The presentation of the material of the article. The article shows that within the classical theory of public finance, the scientific provisions of the German cameramen regarding optimal tax rates, physiocrats regarding balancing of budget revenues and expenditures, representatives of classical political economy regarding budgeting favorable conditions for the market, representatives of the German historical school concerning an increase in the share of government spending in GDP, marginalists on the equivalence of taxes and public goods, representatives of neoclassical eq. onomic school to introduce a progressive tax system. It is noted that within the framework of the modern theory of public finances, the scientific provisions of Keynesianism and neo-Keynesianism on countercyclical budgetary regulation of the economy, monetarism regarding the influence on the aggregate demand for changes in the amount of money in circulation, the new neoclassicism to reduce the tax burden on business, and the non-classical synthesis are important policies based on social justice, and neoinstitutionalism with respect to state budgeting institutions. It also emphasized the need to use specific theoretical approaches to reforming the country's budgetary system. Results and its discussion. Selected scientific provisions of the budget reform may find practical application provided that the Ukrainian realities of military-political and socio-economic content are taken into account. Conclusions. The scientific provisions of the classical and contemporary theory of public finances, as well as specific theoretical approaches to reforming the budget system, formulated in line with the main lines of economic thought, can form the theoretical basis of budget reform in Ukraine. Their use in the development and implementation of the reform must be based on the Ukrainian realities of today.

Б.Є. КВАСНЮК ПРО ЗАЛЕЖНІСТЬ ЕКОНОМІЧНОГО ЗРОСТАННЯ ВІД РІВНЯ ЗАОЩАДЖЕНЬ

Статтю присвячено видатному вченому Борису Євгеновичу Кваснюку, який у своїх наукових дослідженнях приділяв особливу увагу широкому спектру актуальних проблем економічного зростання, підвищення ефективності державного регулювання економіки, зробив вагомий внесок у теорію економічного зростання, науково обґрунтував базові структурні пропорції ВВП для забезпечення стабільного інвестування економічного зростання в Україні. У його працях на високому науковому рівні було викладено теоретичні та методологічні основи формування національних заощаджень, їх специфіку для різних інституційних секторів економіки, показано вплив політики уряду на рівень споживчих витрат у ВВП і валове нагромадження капіталу. Б.Є. Кваснюк виявив причини коливання в Україні рівня валового заощадження і високу залежність економіки від зовнішнього фінансування та зовнішніх шоків. Задовго до нової кризи 2009 р. вчений попереджав про необхідність державної підтримки вітчизняних виробників, поки вони не підвищать свою конкурентоспроможність до рівня, який забезпечить баланс у зовнішній торгівлі товарами та валютну стабільність. Він також передбачив, що згодом закордонні доходи українців стануть чинником балансування поточного рахунку платіжного балансу, а доходи від прямих іноземних інвестицій – чинником його погіршення, що посилить залежність української економіки від зовнішніх факторів. Праці Б.Є. Кваснюка залишаються актуальними і для нових поколінь дослідників, оскільки розкривають фундаментальні засади економічного розвитку і роль держави в підтримці макроекономічної збалансованості.

Fiscal Decentralization - World Experience and Our Practice

Summary Although it is yet to be systematically investigated where the initiative for fiscal decentralization came from, limited evidence suggests that decentralization offers great opportunities to improve the delivery of public services, and that the result depends on the type of decentralization that has been implemented and the institutions that implement it. Not rare are the examples that decentralization is implemented haphazardly without a proper legal framework and clearly defined rules or is simply imported from another country, without taking into account whether the local authorities in the country are able to carry out their responsibilities. Decentralization is often a matter of political reality, and in itself, it is neither good nor bad. Fiscal decentralization is especially topical in many countries due to fears of further growth in public spending. Data on the extent of public spending in most countries, especially in the last two decades show the constant increase in public spending in GDP. The results of numerous studies on the subject indicate the high degree of correlation between fiscal decentralization and growth of public spending in a way that centralization is associated with a greater share of public spending in GDP. Therefore, a part of the professional community has long held the view that fiscal decentralization contributes to greater efficiency in the allocation of resources and reduces the amount of public spending.

Is There Population with Tertiary Education in Romania Still Interested in Research?

In the past 25 years, in Romania, the intensity of R & D activities has declined significantly in most industries. This trend was driven primarily by the lower attention of the government policies of governments after 1990, resulting in particularly low share of research spending in GDP. This had a double negative impact. On one side was affected material basis of research, while on the other side salary levels of researchers along with education and health, remained at very low levels. Based on these considerations the paper examines the evolution of percentage of researchers in total employment in correlation with factors as: the percentage of population with tertiary educational attainment level, the percentage of total intramural R&D expenditure in GDP, the percentage of R&D labour costs in GDP in Romania, compared to Bulgaria, Czech Republic, France, Hungary and Poland. Unfortunately, in what concerns us, the answer is negative.

Анализ Факторов Динамики Реального Валютного Курса Рубля (Analysis of Factors Affecting the Dynamics of the Real Ruble Exchange Rate)

Russian Abstract: Целью настоящей работы является проведение комплексного анализа влияния факторов на динамику реального обменного курса рубля. Во-первых, изучены основные теоретические и эмпирические модели реального обменного курса, выявлены ключевые факторы его краткосрочной и долгосрочной динамики, включая дифференциал производительности труда, условия торговли, чистые иностранные активы, государственные инвестиции, импортные тарифы и т.д. Во-вторых, проанализированы основные тенденции макроэкономических показателей, оказывающих воздействие на формирование реального обменного курса рубля в до- и посткризисный периоды. Исследованы причины различий в степени укрепления реального курса валют ряда стран-экспортеров сырья в 2000-х гг. В-третьих, на основе модели векторной авторегрессии проведена оценка долгосрочных эластично-стей реального эффективного курса рубля по таким фундаментальным факторам, как дифференциал производительности труда, реальная цена на нефть, чистый отток частного капитала, доля государственных расходов в ВВП, за период 1 кв. 1999 г. – 1 кв. 2014 г. Проведенный дисперсионный анализ показал, что более 60% дисперсии реального эффективного курса рубля объясняется инновациями в реальной цене на нефть и дифференциале производительности труда. В-четвертых, в результате построения импульсных функций отклика выявлена значимость воздействия шоков фундаментальных факторов на динамику реального курса.English Abstract: The aim of this work is to conduct a comprehensive analysis of the influence of factors on the dynamics of the real exchange rate. Firstly, the basic theoretical and empirical models of the real exchange rate are studied, key factors of its short- and long-term changes are identified, including differential productivity, terms of trade, net foreign assets, government investment, import tariffs, etc. Second, the analysis of the main trends of macroeconomic indicators that impact on the formation of the real exchange rate in the pre- and post-crisis periods is made. The reasons for differences in the appreciation of the real exchange rates of a number of commodity-exporting countries in the 2000s. Thirdly, on the basis of the a-vector autoregression model the long-term-elastic stey real effective exchange rate on such fundamental factors as labor productivity differential, the real price of oil, the net outflow of private capital, the share of government spending in GDP for the period 1 sq. 1999 - 1Q. 2014, are evaluated. The above analysis of variance showed that more than 60% of the variance of the real effective exchange rate is explained by innovations in the real price of oil and differential productivity. Fourth, as a result of the construction of the pulse response functions were significant impact shocks fundamental factors on the dynamics of the real exchange rate shown.

The impact of the total tax rate reduction on public services provided in Romania

Against the background of economic globalization, governments tend to take tax measures disadvantageous to society in order to increase the attractiveness of the business environment. A common measures for this purpose is the reduction in tax rate. According to the classical theory of tax competition such measure leads to under the provision of public goods. This article aims to show, through an econometric analysis, whether in Romania, in the period 2006-2013, reducing total tax rate had a negative impact on public services. For this, using linear regression technique, the article analysed the correlation between total tax rate and the variation in the share of the main public service spending in GDP.

Correlation of wage growth and labor productivity in military-industrial complex of Russia through 2020

An analysis of wage growth and labor productivity in the military-industrial complex of Russia is given in the article. The evaluation and analysis of military spending in Russia and countries in the world are presented. Error correction calculations of the amount and proportion of military spending in GDP compared with the data of the World Bank has been made.