The Impact of Public Expenditures in Education, Health, and Infrastructure on Economic Growth and Income Distribution in Peru
Peer Reviewed
Date issued
Feb 2014
Subject
Public Debt;
Government Budget;
Public Expenditure;
Health Expenditure;
Education Expenditure;
Economic Development;
Income Distribution
JEL code
C68 - Computable General Equilibrium Models;
H50 - National Government Expenditures and Related Policies: General;
H51 - Government Expenditures and Health;
H52 - Government Expenditures and Education;
H54 - Infrastructures • Other Public Investment and Capital Stock
Country
Peru
Category
Working Papers
The Peruvian economy has exhibited remarkable growth in the past 20 years. Good tax and monetary policies, along with comprehensive structural adjustment, which has attracted substantial foreign investment, are regarded as the pillars of this success. Notwithstanding the advances experienced on reducing poverty, lowering inequality and unemployment continue to be elusive targets for the Peruvian government and constitute main causes of social unrest. This paper assesses the impact of Peruvian public expenditures in education, health, and infrastructure on economic growth, poverty, and income distribution in the past 20 years using a Dynamic Computable General Equilibrium Model (DCGEM), which is an economy-wide model that describes the behavior of producers and consumers and the linkages among them.
