Productive Government Expenditure And Economic Growth

The authors provide a comprehensive survey of the recent literature on the link between productive government expenditure and economic growth. Starting with the seminal paper of Robert Barro (1990) they show that an understanding of the core results of the ensuing contributions can be gained from the study of their respective Euler equations. They argue that the existing literature incorporates many relevant aspects, however, policy recommendations tend to hinge on several knife-edge assumptions. Therefore, future research ought to focus more on idea-based endogenous growth models to check the robustness of policy recommendations.