Recoge: 1. Introduction - 2. Empirical strategy and data - 3. Panel unit root tests and cointegration analysis - 4. Heterogeneous panel ECM estimation - 5. Robustness analysis - 6. Implications for policy - 7. Concluding remarks.

The relationship between government spending and economic growth is an important and controversial issue in modern societies. In this paper, the correlation between economic growth and government expenditure is studied. The analysis is based on data for the European Union countries and panel data techniques are used.

Recoge: Composition and quality of public expenditures in the EU - Improving the efficiency of public expenditure - Growth-enhancing and high-quality expenditure in the EU budgetary framework - A way forward for the assessment of quality of public expenditures in the EU.

This book makes a unique contribution in advancing understanding of the fiscal condition and growth potential of the New Member States of the European Union. It provides new data, policy evaluation, and offers national and regional perspectives. The core research questions are the effect of public investment in the context of macroeconomic disequilibrium and how it is possible to finance capital accumulation in the present and future conditions of mounting public sector debt. The contributors reveal that there is now a convincing case for public investment as an essential driver of convergence and growth in Europe. However, a new international and inter-generational fiscal pact to frame a more optimistic view of the role of government is needed. This book explores how public investment matters for growth, how fiscal conditions may support investment, and the role EU regional policy can have in terms of structural change and investment needs. Public Investment, Growth and Fiscal Constraints provides new data analyses on the EU New Member States in Central and Eastern Europe making it an essential tool for academics, students and practitioners interested in public finance and European Economics. The structural and public finance issues in these former transition economies raised in this book will also strongly appeal to policymakers, officials and consultants. The book is based on an independent research project of the University of Milan, supported by the European Investment Bank.

This article empirically examines the fiscal policy elements affecting economic growth in 27 European countries and Switzerland (Without the United Kingdom). The research objective is to estimate the impact of macroeconomic variables such as tax revenue, government expenditure and public debt on the economic development of 28 European countries. The study employs a panel ordinary least squares (POLS) technique with a fixed effect estimation method. The Hausman test was applied to support the validity of the fixed effect over the random effect estimation model. Annual secondary data for the period 1995-2020 were used, including 728 observations. Based on the results, it may be inferred that the increase in government expenditure and tax revenue leads to an increase in economic growth in 28 EU countries. However, the higher rates of public debt lead to a decrease in economic growth. From the standpoint of fiscal policy, we conclude that Keynesian theory in the 28 EU countries was present. The study has empirically established the importance of fiscal policy tools in European countries. The study calls for the establishment of moderate fiscal policy strategies that would help ensure solvency and stimulate economic growth.

Mario Baldassarri and Francesco Busato evaluate the impact produced by a new cycle of structural reforms over European Union economies. The structural reforms concern the size and the composition of government expenditure, the good and services markets, and the labour market. The book illustrates how the key challenge for European countries is not to discuss how policies could be implemented (e.g. fiscal policy competition Vs fiscal policy coordination), but to implement them.

The report documents the impressive achievements of the European growth model over the last 50 years. Accounting for the stresses it is experiencing and assessing the longer-term challenges that Europe will face, the report then evaluates the six principal components of the model: Trade, Finance, Enterprise, Innovation, Labor, and Government. It finds that the European growth model has been a powerful engine for economic convergence, helping developing countries in Europe catch up to their richer neighbors and become high-income economies. But recent changes in and outside Europe necessitate change. The report proposes the adjustments needed to make trade and finance work even better, to encourage enterprise and innovation in parts of Europe which have begun to lag, and address shortcomings in the functioning of labor markets and governments. The changes proposed would restart the European convergence machine, make Europe's enterprises competitive, and help Europeans afford the highest standards of living in the world.