TY - BOOK ID - 84541532 TI - Output Decline and Government Expenditures in European Transition Economies AU - Schwartz, Gerd. AU - Chu, Ke-young. PY - 1994 SN - 1462392377 1455234354 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Aggregate Factor Income Distribution KW - Capital investments KW - Capital spending KW - Debt service KW - Expenditure KW - Expenditures, Public KW - Exports and Imports KW - External debt KW - Government subsidies KW - Income KW - Interest payments KW - International economics KW - International Lending and Debt Problems KW - Macroeconomics KW - National accounts KW - National Government Expenditures and Related Policies: General KW - National Government Expenditures and Related Policies: Infrastructures KW - Other Public Investment and Capital Stock KW - Public finance & taxation KW - Public Finance KW - Subsidies KW - Poland, Republic of UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541532 AB - This paper discusses the role of government expenditure policies in the decline in aggregate output in European transition economies. It is argued that there is little evidence for the hypothesis that more expansionary expenditure policies would have helped to mitigate the output decline. While measurement problems allow for very preliminary conclusions, it appears that government expenditures were, generally, not a binding constraint for output. In those cases where it could be argued that government expenditures were a binding constraint, they were usually not the only one. Government expenditure levels still remain on the high side, at least when compared with European market-based economies, and there exists few reasons for pursuing expansionary expenditure policies to lift European transition economies out of the “transitional recession.” While raising expenditure levels per se is an unappealing policy choice, a further reordering of expenditure priorities is desirable. In particular, increases in the share of government expenditures on capital--human and physical--are needed to improve long-run output potential. ER -