Balanced budget multipliers

Article Abstract:

The approximate range for balanced budget multipliers is developed for a neoclassical case where the state balances the budget with lump sum taxes. The model differentiates between purchase of goods and labor services. GDP may fall as final output purchases and private sector production increases. Constant returns to scale for that sector's production technology generates a multiplier effect in GDP similar to that of the private sector.

Economic indicators, Government purchasing, Multipliers (Economics)

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Tests of the Maizel's hypothesis for Latin American countries

Article Abstract:

The Maizels' hypothesis states that export component increases saving more than the non-export part of the gross domestic product. A time series methodology of unit root and cointegration is used to test the Maizels' hypothesis in nine Latin American countries, namely Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Panama, Paraguay and Venezuela. Results validate the Maizels' hypothesis.

Gross Domestic Product, Economic aspects, Exports, Latin America

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Dynamic nature of private investment functions and its determinants in developing countries

Article Abstract:

Changes in bank credit and net capital inflow determine private investment expenditure. In developing countries, this investment is positively and negatively affected with the entry of government investments. The positive effect comes in the form of changes in private output, while the negative effect comes in the form of a reduction in banks' domestic credits to the private sector.

Financial Planning, Government spending policy, Capital movements, Bank loans

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