Public Spending in Developed World Countries in the 20th Century Cover Image

Javna potrošnja u razvijenim zemljama svijeta tokom XX stoljeća
Public Spending in Developed World Countries in the 20th Century

Author(s): Adnan Efendić
Subject(s): Economy
Published by: Ekonomski fakultet u Sarajevu
Keywords: public spending; developed countries; macroeconomic stability

Summary/Abstract: The analysis of the use of developed countries' public spending in the last century points to the following conclusion: When the growth and development of these countries reached the stage of great utilization of capacities, the trend of additional use of public spending stopped. Public spending as an instrument of macroeconomic policy is used to a lesser extent in highly developed countries after these countries had reached a high level of economic development. As national economies approached their potential product, additional use of public spending instrument decreased. It is increasingly difficult to find additional projects, programs that would result in a greater social benefit than the additional cost of doing these activities by increasing public spending. Effects of additional investment may become negative sue to the increase of inflation rate in a country, pushing out private investment and private sector output, and thus economy stagnation and threatening macroeconomic stability. However, on the road from war-destroyed, crisis-hit economy to highly developed world countries, the public spending instrument has been an unavoidable factor that accompanied their historical evolution.

  • Issue Year: 2004
  • Issue No: 24
  • Page Range: 35-45
  • Page Count: 11
  • Language: Bosnian