Date of Graduation

Spring 5-18-2018

Document Type

Thesis

Degree Name

Master of Science in International and Development Economics (MSIDEC)

College/School

College of Arts and Sciences

Department/Program

Economics

First Advisor

Suparna Chakraborty

Abstract

Abstract: In the past, a lot of studies put more emphasis on the aggregate government expenditure as the primary driver of social and economic growth which is in the short term. The studies did not capture expenditures on infrastructure, education, and defense which are the disaggregate government expenditure that sustains both social and economic growth in the long term.

The objective of this study is to determine how the demand and supply side of government expenditure can impact on social and economic growth using 45 both advanced and emerging countries. It also wants to establish the expenses that have a long-term effect on growth using balance panel dataset and estimate the relationship between the expenditures in different sectors. We use OLS model to evaluate the impact. The main result is that: when we consider a panel set using fixed effect on the leading indicators of economic growth, that the supply side of public spending on infrastructure, education, transport, communication, agriculture, etc. increases production and economic growth in the sampled countries. Besides, we used data from 1995-2015, and the finding will help us to understand the long-term effect of government expenditure that enhances production and growth while controlling for the demand side.

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