Studies that analyze the impact of fiscal policy on the economic growth of countries, states and cities are recurrent. The most commonly considered research questions investigate whether public spending can increase economic growth with an increase of productivity in the private sector. In this sense, the objective of this study is to investigate the relationship that exists between economic growth, considered by the Gross Domestic Product (PIB), and the variable that make up public spending in the largest cities in the south of Brazil. This is descriptive research that uses a quantitative and cross section approach. The article presents a non-linear, multivariable mathematical model that is evaluated empirically by means of an application to public spending in the largest cities in southern Brazil. Beginning with the use of this model, the PIP for the cities was estimated and compared with real values of the PIB. Results show an estimating error of 22.45% with 85.16% reliability. Thus it was concluded that spending by local governments plays an important role in economic growth.
economic growth; public spending; cities in the southern region
