000131417 001__ 131417 000131417 005__ 20240731103412.0 000131417 0247_ $$2doi$$a10.3934/QFE.2023030 000131417 0248_ $$2sideral$$a136830 000131417 037__ $$aART-2023-136830 000131417 041__ $$aspa 000131417 100__ $$0(orcid)0000-0002-8816-5816$$aPeña, Guillermo$$uUniversidad de Zaragoza 000131417 245__ $$aInterest rates affect public expenditure growth 000131417 260__ $$c2023 000131417 5060_ $$aAccess copy available to the general public$$fUnrestricted 000131417 5203_ $$aThe aim of this paper is to analyze interest rates and public spending to provide policy implications. Concretely, it explores the influence of these rates on public expenditure growth as opposite to the traditional direction view, dealing with 216 countries for the 1972–2021 period and estimating system GMM models. A balanced subsample is used for assessing Granger causality through a recent panel technique. The results are robust for the used dependent and target variables and also the methodology. They show that decreasing interest rates are associated with—and in some cases also lead to—lower per capita public expenditure growth. These results can be interpreted as a twofold effect of shifts in relative prices—through fiscal illusion—and of crowding out of private investment with respect to the public sector. 000131417 536__ $$9info:eu-repo/grantAgreement/ES/UZ/JIUZ-2022-CSJ-19$$9info:eu-repo/grantAgreement/ES/MICINN/PID2020-112773GB-I00$$9info:eu-repo/grantAgreement/ES/DGA/S39-23R 000131417 540__ $$9info:eu-repo/semantics/openAccess$$aby$$uhttp://creativecommons.org/licenses/by/3.0/es/ 000131417 592__ $$a0.0$$b2023 000131417 593__ $$aBusiness, Management and Accounting (miscellaneous)$$c2023 000131417 593__ $$aStrategy and Management$$c2023 000131417 593__ $$aFinance$$c2023 000131417 593__ $$aEconomics, Econometrics and Finance (miscellaneous)$$c2023 000131417 594__ $$a0.3$$b2023 000131417 655_4 $$ainfo:eu-repo/semantics/article$$vinfo:eu-repo/semantics/publishedVersion 000131417 7102_ $$14000$$2415$$aUniversidad de Zaragoza$$bDpto. Análisis Económico$$cÁrea Fund. Análisis Económico 000131417 773__ $$g7, 4 (2023), 622-645$$pQuant. financ. econ.$$tQuantitative finance and economics$$x2573-0134 000131417 8564_ $$s852382$$uhttps://zaguan.unizar.es/record/131417/files/texto_completo.pdf$$yVersión publicada 000131417 8564_ $$s1510124$$uhttps://zaguan.unizar.es/record/131417/files/texto_completo.jpg?subformat=icon$$xicon$$yVersión publicada 000131417 909CO $$ooai:zaguan.unizar.es:131417$$particulos$$pdriver 000131417 951__ $$a2024-07-31-10:04:30 000131417 980__ $$aARTICLE