Alesina, Alberto; Ardagna, Silvia; Perotti, Roberto; … - In: American Economic Review 92 (2002) 3, pp. 571-589
This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. We find a sizeable negative effect of public spending—and in particular of its wage component—on profits and on business investment. This result is consistent with different theoretical models in...