Abstract:

One of the effective pen in the Keynesian approach that claims that the state should interfere with the economy is public spending. Some economists say that public spending is inefficient because politicians serve voting purposes, and that these spending will return as taxes in the future periods, while some economists say that public spending will be necessary and useful for the reanimation of the economy. This study was studied using models taking into account the spatial dependency of how government spending in Europe between 1997 and 2017 influenced the growth of a person-to-person domestic net income. The horizontal cuts (lands) that have a neighbourhood relationship have made it necessary to use spatial economic methods. For this, the spatial delay model, the spatial error model, the spatial Durbin model, the general spatial model and their racal and fixed effective versions and the generalized racal effective spatial error model have been studied. According to the findings obtained from the established models, the increase in the annual growth of government spending in all models increases the GDP growth per person. Politicians who want to catch the full employment level in Europe can go on the way to increase government charity spending. In addition, they must also take into account the situation in neighboring countries. Because the ratio indicating spatial self-correlation has been statistically meaningful, that is, the closer the spaces to each other, the more they affect each other. This spatial addiction is seen in both spatial errors and spatial delays models. That is, both neighborhood errors and neighbor-dependent variables per person GDP growth values affect neighbors.

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