THE COMPOSITION OF PUBLIC EXPENDITURES ON ECONOMIC AFFAIRS IN CEE COUNTRIES AND ITS IMPACT ON ECONOMIC GROWTH
THE COMPOSITION OF PUBLIC EXPENDITURES ON ECONOMIC AFFAIRS IN CEE COUNTRIES AND ITS IMPACT ON ECONOMIC GROWTH

Summary/Abstract: The aim of this study is to investigate the composition of public expenditures on economic affairs for a group of CEE countries and its impact on economic growth. Even if the economic theory generally admits the positive impact of such expenditures, from the policy-making perspective the choices regarding the level and the composition of these expenditures are crucial, as these expenditures are under strong influences of a mix of political, institutional and macroeconomic factors. The existing empirical evidence does not provide clear answers to the question of which is the optimal structure for economic affairs expenditures. Using regression analysis for data over 1995-2012, we estimate the intensity of the correlations between these categories of public expenditures and economic growth. Our results show that growth is affected only by certain types of expenditures, with significant different intensities.

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