Role of government spending on economic growth: an endogenous potential model for Bolivia
Palabras clave:Role of public spending, crowding-out effect, potential output growth, real effective growth
The purpose of this paper is to contribute with an endogenous potential growth model (EPGM) for Bolivia from 1993 to 2012. The empirical eviden-ce suggests that government consumption is the main exogenous determinant on potential growth (EPGM) with differentiated time effects: it accelerates contemporaneously economic growth but it affects negative and dynamically on long-term growth rate. Public and private investments have significant and dynamical degree of substitution (crowding out effect). As complementary analysis, effects of public spending on real effective growth are evaluated.
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