Document Type

Journal Article

Department/Unit

Department of Economics

Title

Prosperity or stagnation: The role of government expenditures

Language

English

Abstract

The focus of this paper is to examine the effects and mechanism of government expenditures (GEs) in determining the long-term inflation differentials across countries. For this purpose, we formulate a theoretical model and the related regression system. The models allow us to understand and quantify the supply-side (SS) and demand-side (DS) effects of GEs in determining prosperity or stagnation across countries. This study provides cross-country evidences and related mechanisms supporting the hypothesis and conclusion that active short-term AD policies and over-estimated potential output, as argued in Orphanides (2003), were contributive to the Great Inflation.

Keywords

Inflation, government expenditures, growth, investment, prosperity, stagnation, supply-side, demand-side

Publication Date

12-2017

Source Publication Title

Singapore Economic Review

Publisher

World Scientific Publishing

Peer Reviewed

1

DOI

10.1142/S0217590817500242

Link to Publisher's Edition

http://dx.doi.org/10.1142/S0217590817500242

ISSN (print)

02175908

ISSN (electronic)

17936837

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