Public spending

The amount that the government spends is a significant part of most economies, ranging from 30% to 50% of GDP across OECD countries. Periodic efforts to reduce it through programmes of austerity have generally been followed by prolonged rebounds, as the need to spend money on health, pensions and welfare creeps upwards (for more detail, see this Briefing). Keynes argued that public spending should be increased during recessions as a way of boosting demand. See also fiscal policy.