448 Ekonomický časopis, 65, 2017, č. 5, s. 448 – 458 Public Spending and Economic Growth: An Empirical Analysis of Developed Countries Bernur ACIKGOZ* – Serkan CINAR** Abstract The purpose of this paper is to investigate the effects of public spending on economic growth and examine the sources of economic growth in developed countries since the 1990s. This paper analyses whether public spending effect on economic growth based on Cobb-Douglas Production Function with the two econometric models with Autoregressive Distributed Lag (ARDL) and Dynamic Fixed Effect (DFE) for 21 developed countries (high-income OECD countries), over the period 1990 – 2013. In comparison to similar empirical studies, our paper will add to the existing literature by extending the sample of developed countries and providing the latest empirical evidence for non-linear and struc- tural breaks. Our model results are parallel to each other and the models sup- port that public spending has an important role for economic growth. This result is accurate with theories and previous empirical studies. Keywords: public spending, economic growth, panel data, ARDL models JEL Classification: O47, H50, C33, H11 Introduction Nowadays public spending and economic growth are in the centre of economic debate. Economists are divided as to whether public spending expansion helps or slows down economic growth. Some of the economists argue that government programs provide valuable “public goods” such as education and infrastructure. They also say that increases in public spending can assist economic growth by giving money to private sector. But some of economists have an opposite view. They explain that governments become too large and that higher expenditures * Bernur ACIKGOZ, Izmir Katip Celebi University, Faculty of Economics and Administrative Sciences, Department of Public Finance, Cigli, Izmir, Turkey; e-mail: bernur.acikgoz@ikc.edu.tr ** Serkan CINAR, Celal Bayar University, School of Applied Sciences, International Trade Department, Manisa, Turkey; e-mail: serkan.cinar@cbu.edu.tr