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The basic function of public finances is economic stability that implies the use of public finance instruments in order to stabilize economic cycles to achieve full employment, overall price stability, achieving an adequate rate of economic growth, a stable rate economic development. Governments to contribute to economic balances, job creation, and productivity growth tend to boost productive public spending by undertaking long-term activities in the sphere of public investment, namely public, health and education infrastructure, as well as in the sphere of research and development. Both theoretical and empirical studies conclude that public investment impacts on economic growth, represent an instrument of low growth, but their increasing effect is influenced by various factors such as economic circumstances, level of development the quality of governance, the efficient management of investment projects, the sectors in which it is invested, the capital fund, etc. The purpose of this paper is to research the short-term and long-term effects of public investments in the Republic of Northe Macedonia in economic growth. The analysis takes into account the data on the structure of public investment, gross domestic product for the time period 2008-2017. Using the multiple regression analysis OLS, we conclude that in the long run the impact of public investment on economic growth is symbolic given that a very small percentage of public expenditures for public infrastructure investments although Macedonia is characterized by a low capital public fund. [ABSTRACT FROM AUTHOR]

The performance of alternative fiscal rules is examined in an endogenous growth model. The government spends money on infrastructure, maintenance, and health. Infrastructure affects the production of both commodities and health services. The performance of a balanced budget rule, as well as standard and modified golden rules (including and excluding productive spending) and primary surplus rules are compared numerically. Under a range of plausible parameter configurations, a primary surplus rule that excludes productive spending performs better (in a growth sense, although not necessarily from the perspective of short-run macro stability) than alternative rules in response to a variety of shocks. [ABSTRACT FROM AUTHOR]