131417 20240731103412.0 doi 10.3934/QFE.2023030 sideral 136830 ART-2023-136830 spa Peña, Guillermo Universidad de Zaragoza (orcid)0000-0002-8816-5816 Interest rates affect public expenditure growth 2023 Access copy available to the general public Unrestricted The 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. info:eu-repo/grantAgreement/ES/DGA/S39-23R info:eu-repo/grantAgreement/ES/MICINN/PID2020-112773GB-I00 info:eu-repo/grantAgreement/ES/UZ/JIUZ-2022-CSJ-19 info:eu-repo/semantics/openAccess by http://creativecommons.org/licenses/by/3.0/es/ 0.0 2023 Business, Management and Accounting (miscellaneous) 2023 Strategy and Management 2023 Finance 2023 Economics, Econometrics and Finance (miscellaneous) 2023 0.3 2023 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion 4000 415 Universidad de Zaragoza Dpto. Análisis Económico Área Fund. Análisis Económico 7, 4 (2023), 622-645 Quant. financ. econ. Quantitative finance and economics 2573-0134 852382 http://zaguan.unizar.es/record/131417/files/texto_completo.pdf Versión publicada 1510124 http://zaguan.unizar.es/record/131417/files/texto_completo.jpg?subformat=icon icon Versión publicada oai:zaguan.unizar.es:131417 articulos driver 2024-07-31-10:04:30 ARTICLE