ESTIMATING THE IMPACT OF PUBLIC FINANCE FOR THE COUNTRIES OF EUROZONE: INVESTMENT MODEL

The paper focus on the theory and international evidence on the links between public finances and growth. Moreover, paper investigates the effects of inflation rate, government expenditure, general government gross debt, employment rate, growth rate, population, interest rate on public investments of 18 Eurozone Countries. In addition, paper came to the conclusion that these variables determined model at 37.48 percent at 95 percent of probability. In short, results confirmed strong positive correlation between these variables by using method of least squares, fixed effects model, random effects model through Hausman test and examined heteroskedasticity through White test.