PapersFlow Research Brief
Economic Growth and Fiscal Policies
Research Guide
What is Economic Growth and Fiscal Policies?
Economic Growth and Fiscal Policies is the study of how government taxing, spending, and borrowing decisions interact with the drivers of long-run output expansion and development outcomes.
The provided corpus contains 115,327 works on Economic Growth and Fiscal Policies, indicating a large research base, although a 5-year growth rate is not available (N/A). "The theory of economic growth" (1955) by W. Arthur Lewis frames growth as a process shaped by capital accumulation, institutions, and government policy choices. "Pembangunan Ekonomi di Dunia Ketiga" (2000) by Michael P. Todaro emphasizes development-policy constraints and tradeoffs that often condition fiscal-policy effectiveness in lower-income settings.
Research Sub-Topics
Economic Growth Theory
Researchers develop and test neoclassical, endogenous, and unified growth models explaining long-term output per capita increases. Empirical studies validate theories using cross-country panel data.
Portfolio Theory
This sub-topic covers mean-variance optimization, asset allocation, and risk-return tradeoffs in investment portfolios. Studies extend Markowitz models to multi-period and behavioral settings.
Econometrics Methods
Focuses on estimation techniques, time series analysis, and panel data methods for economic inference. Researchers address endogeneity, heteroskedasticity, and instrumental variables.
Investment Analysis
Studies evaluate security valuation, capital budgeting, and performance measurement in financial markets. Includes real options and event studies for investment decisions.
Development Economics in Third World
Examines poverty traps, structural transformation, and aid effectiveness in low-income countries. Researchers analyze institutions, human capital, and trade in development processes.
Why It Matters
Fiscal policy choices matter because they determine how much revenue a state can mobilize, which public goods it can finance, and how public budgets affect investment incentives and macroeconomic stability. "Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue" (2025) argues that achieving a tax-to-GDP ratio of at least 15 percent (a benchmark endorsed by the UN’s Compromiso de Sevilla) is critical for institutional strength, financial market depth, and economic growth, and reports that 71 nations are below this threshold. "IMF Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth" (2025) links growth prospects to spending composition and efficiency under pressures from aging populations, higher interest rates, and rising defense spending, and it recommends reallocating within a fixed spending envelope to raise output. In applied policy discussions, "Canada Can Grow Faster by Unlocking Its Own Market" (2026) reports an estimate that removing internal trade barriers could boost output in Canada by 7 percent, illustrating how policy reforms can target growth through efficiency rather than higher aggregate spending.
Reading Guide
Where to Start
Start with W. Arthur Lewis’s "The theory of economic growth" (1955) because it provides a unifying conceptual map of growth drivers—capital, institutions, population/resources, and government—that helps interpret later fiscal-policy discussions.
Key Papers Explained
Lewis’s "The theory of economic growth" (1955) supplies the baseline growth mechanism and the role of government policy as one determinant among structural factors. Todaro’s "Pembangunan Ekonomi di Dunia Ketiga" (2000) then situates growth policy inside development constraints and policy tradeoffs that can limit fiscal-policy transmission in lower-income settings. The IMF’s "IMF Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth" (2025) and its companion chapter "Chapter 1. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth. Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth" (2025) translate these ideas into an efficiency-and-composition agenda under fiscal pressure. "Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue" (2025) complements the spending focus by emphasizing revenue capacity and the 15 percent tax-to-GDP benchmark, linking fiscal foundations to institutional strength and growth.
Paper Timeline
Most-cited paper highlighted in red. Papers ordered chronologically.
Advanced Directions
For frontier work, combine the IMF’s spending-composition and technical-efficiency agenda (IMF Fiscal Monitor, 2025) with the domestic-revenue capacity focus in "Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue" (2025), then test mechanisms using the empirical toolkit in "Dasar-dasar Ekonometrika" (2006). For structural policy simulation, the provided tools list highlights overlapping-generations model infrastructures (OG-Core and country implementations such as OG-USA, OG-UK, and OG-PHL) designed for dynamic general-equilibrium analysis of fiscal policy; these are natural complements for evaluating intertemporal tradeoffs implied by spending reallocation and tax-capacity reforms.
Papers at a Glance
| # | Paper | Year | Venue | Citations | Open Access |
|---|---|---|---|---|---|
| 1 | Analisis Data Kualitatif | 1992 | — | 2.1K | ✕ |
| 2 | TEORI PORTOFOLIO DAN ANALISIS INVESTASI | 2016 | Universitas Terbuka eB... | 1.9K | ✕ |
| 3 | Manajemen Keuangan : Teori dan Aplikasi | 2001 | — | 1.9K | ✕ |
| 4 | Metode Penelitian Sosial | 2002 | — | 1.8K | ✕ |
| 5 | Reliabilitas dan validitas | 1997 | — | 1.6K | ✕ |
| 6 | Dasar-dasar Ekonometrika | 2006 | — | 1.3K | ✕ |
| 7 | The theory of economic growth | 1955 | — | 1.2K | ✕ |
| 8 | Portofolio dan Investasi: Teori dan Aplikasi | 2010 | — | 1.1K | ✕ |
| 9 | Teori Portofolio dan Analisis Investasi | 2010 | — | 1.1K | ✕ |
| 10 | Pembangunan Ekonomi di Dunia Ketiga | 2000 | — | 1.0K | ✕ |
In the News
Canada Can Grow Faster by Unlocking Its Own Market
January 27, 2026 ***Knocking down internal trade barriers could boost output in Canada by 7 percent***
Government of Canada announces funding to support ...
* In October 2025, the Federal Economic Development Agency for Northern Ontario (FedNor) announced $10million to support Kap Paper and protect over 2,000jobs across northeastern Ontario.
2025 Federal Budget | OCC
### Rapid Policy Update ## 2025 Federal Budget November 4, 2025
Ontario's Economic and Fiscal Outlook in Brief
To provide more transparency about the province’s economic outlook amid the elevated degree of economic uncertainty, the Ontario Ministry of Finance has developed Faster Growth and Slower Growth sc...
Chapter 1. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth. Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth
This chapter examines how policymakers can change the composition of public spending within a fixed total spending envelope to lift economic growth. It focuses on the potential gains to output f...
Code & Tools
Open repository for collaborative research on economic models, integrating theory, simulations, and data. Contribute papers, code, and datasets to ...
OG-Core is an overlapping-generations (OG) model core theory, logic, and solution method algorithms that allow for dynamic general equilibrium anal...
OG-USA is an overlapping-generations (OG) model that allows for dynamic general equilibrium analysis of fiscal policy for the United States. OG-USA...
OG-UK is an overlapping-generations (OG) model of the economy of the United Kingom (UK) that allows for dynamic general equilibrium analysis of fis...
OG-PHL is an overlapping-generations (OG) model that allows for dynamic general equilibrium analysis of fiscal policy for the Philippines. OG-PHL i...
Recent Preprints
IMF Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth
is high and rising, with increasing defense spending, aging populations, and higher interest rates putting additional strain on public finances. Governments should take decisive action to streng...
Chapter 1. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth. Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth
This chapter examines how policymakers can change the composition of public spending within a fixed total spending envelope to lift economic growth. It focuses on the potential gains to output f...
Chapter 1. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth. Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth
This chapter examines how policymakers can change the composition of public spending within a fixed total spending envelope to lift economic growth. It focuses on the potential gains to output f...
Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue
Tax capacity is fundamental to state-building and sustainable development. Achieving a tax-to-GDP ratio of at least 15 percent—endorsed by the UN’s Compromiso de Sevilla—is critical for institution...
How fiscal policy affects financial development: Empirical ...
Fiscal policy, as the primary tool of macroeconomic management, plays an important role in influencing financial development (Chugunov & Pasichnyi, 2024). Through the collection of government reven...
Latest Developments
Recent research indicates that global economic growth is projected at around 3.3% for 2026, supported by fiscal and monetary measures, technology investment, and private sector adaptability (IMF). The US economy is expected to outperform economist forecasts with a GDP growth of 2.5% in 2026, driven by tax cuts and a shift away from tariffs (Goldman Sachs). Additionally, Deloitte forecasts a 4.5% global GDP growth in 2026, emphasizing expansionary fiscal policies (Deloitte). Research also highlights ongoing discussions on fiscal policies, including the effects of fiscal measures on GDP growth and government spending efficiency (CBO, IMF Fiscal Monitor).
Sources
Frequently Asked Questions
What is meant by economic growth in the core growth literature referenced here?
"The theory of economic growth" (1955) by W. Arthur Lewis presents economic growth as a process influenced by saving and investment, institutional change, population and resources, and government policy. The book’s framing treats policy as one determinant among structural factors that shape the pace and sustainability of output expansion.
How do fiscal policies connect to development challenges in lower-income countries?
"Pembangunan Ekonomi di Dunia Ketiga" (2000) by Michael P. Todaro describes development as involving policy constraints and tradeoffs that differ from those in advanced economies. In that framing, fiscal choices operate alongside broader development problems and policy approaches rather than acting as a standalone lever.
Which fiscal-policy lever is emphasized by recent evidence-based work on state capacity?
"Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue" (2025) emphasizes domestic revenue mobilization and tax capacity. It states that a tax-to-GDP ratio of at least 15 percent is a critical benchmark and reports that 71 nations fall below it.
How can governments pursue growth when total spending cannot rise?
"Chapter 1. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth. Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth" (2025) argues that policymakers can raise output by changing the composition of spending within a fixed total spending envelope. It highlights technical efficiency—maximizing output for a given level of resources—as one channel for growth gains.
Which methods references in the provided list are useful for empirical fiscal-growth research design?
"Dasar-dasar Ekonometrika" (2006) provides core econometric tools commonly used to estimate relationships between fiscal variables and growth outcomes. For qualitative and mixed-method policy evaluation, "Analisis Data Kualitatif" (1992) and "Metode Penelitian Sosial" (2002) provide frameworks for systematic evidence collection and inference.
How do fiscal policies interact with investment behavior and financial markets in the provided literature base?
Investment and portfolio-choice texts such as "TEORI PORTOFOLIO DAN ANALISIS INVESTASI" (2016), "Portofolio dan Investasi: Teori dan Aplikasi" (2010), and "Teori Portofolio dan Analisis Investasi" (2010) explain how returns, risk, and market structure shape asset allocation decisions. These mechanisms are relevant for fiscal policy because taxes, public borrowing, and public spending can change expected returns and risk in financial markets, affecting private investment channels that feed into growth.
Open Research Questions
- ? Which reallocations of public spending within a fixed envelope produce the largest output gains under the technical-efficiency framing described in "Chapter 1. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth. Fiscal Monitor, October 2025. Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth" (2025)?
- ? How does moving countries toward the 15 percent tax-to-GDP benchmark discussed in "Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue" (2025) causally affect long-run growth versus institutional strength and financial-market depth?
- ? Which identification strategies, consistent with the toolkit in "Dasar-dasar Ekonometrika" (2006), are most credible for separating the growth effects of spending composition from concurrent reforms (for example, internal trade liberalization)?
- ? How do development constraints emphasized in "Pembangunan Ekonomi di Dunia Ketiga" (2000) mediate the effectiveness of fiscal-efficiency reforms proposed in the IMF Fiscal Monitor (2025) across low- and middle-income contexts?
- ? How do fiscal-policy changes transmit to private investment behavior through portfolio and capital-market mechanisms described in "TEORI PORTOFOLIO DAN ANALISIS INVESTASI" (2016) and related investment texts, and which channels dominate in practice?
Recent Trends
Recent materials in the provided data emphasize fiscal constraints and efficiency rather than unconditional spending expansion. "IMF Fiscal Monitor, October 2025.
Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth" and its Chapter 1 (2025) focus on reallocating spending within a fixed envelope and improving technical efficiency amid pressures from aging populations, higher interest rates, and rising defense spending.
2025On the revenue side, "Building Tax Capacity for Growth and Development: Evidence-Based Analysis for Mobilizing Domestic Revenue" highlights a 15 percent tax-to-GDP benchmark and reports that 71 nations remain below it, framing tax capacity as a binding constraint for growth and state-building.
2025In policy debate, "Canada Can Grow Faster by Unlocking Its Own Market" reports an estimate of a 7 percent output boost from removing internal trade barriers, reinforcing the broader trend toward growth strategies centered on efficiency and market integration rather than larger budgets.
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