Effects of public spending on the GDP in the States of Mexico, 1999-2014

Abstract

The objective of this paper is to analyze the effects of public expenditure on Gross Domestic Product (gdp) over the period 1999-2014 for the Mexican states. By using a quantile regression, it is found that total public expenditure has been relevant in the explanation of economic growth, mainly in the case of the largest states with positive and significant effects. On the contrary, the public expenditure associated to infrastructure seems to have not contributed to economic growth of the states of any size.