The Role of Public Spending in the Growth Theory Evolution

We propose in this paper a survey over the evolution of growth theory with respect to public spending. Building on evidence from neoclassical growth models, we emphasize growth effects of public spending in the endogenous growth literature, and particularly in the Barro (1990) model with productive public spending. A final section proposes a discussion on what fundamentally changed the introduction of productive public spending in the growth theory, as well as on some future research paths.