Evidence on economic growth and government size

Roy, Atrayee Ghosh

doi:10.1080/00036840601007393

Cited by 26 publications

(10 citation statements)

References 24 publications

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“…However, the variations in labor and oil price are never significant. The absence of an effect of the labor variable is not an unusual result in the literature (see, e.g., Roy 2009). Also, it is unlikely that oil prices affected French economic growth before World War II, which explains their lack of significance.…”

Section: A Ideology and Economic Growthmentioning

confidence: 78%

Political Ideology and Economic Growth: Evidence From the French Democracy

Facchini

Melki

2014

Economic Inquiry

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We provide a test of the impact of voters' political ideology on economic growth and of the role of preferences for government size as a transmission channel. We focus on France from the beginning of its stable democratic experience in 1871. A move of voters' ideology to the right increases economic growth over the total observation period. However, the growth effect of ideology is mediated by voters' preferences for government size only during the post‐World War II period. For reverse causality concerns, we use the political ideology of other historical democracies as an instrument variable for France's ideology. (JEL E6, O43, H11)

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Section: A Ideology and Economic Growthmentioning

confidence: 78%

Political Ideology and Economic Growth: Evidence From the French Democracy

Facchini

Melki

2014

Economic Inquiry

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“…Several other studies such as Karras (1996Karras ( , 1997, Guseh (1997), Aly and Strazicich (2000), Folster and Henrekson (2001), Alleyne et al (2004), Romero-Avila andStrauch (2008), Roy (2009), Afonso and Fuceri (2010) mentioned that public spending had a significant negative impact while other studies such as Ram (1986), Ghali (1999), Gunalp and Gur (2002), Alexiou (2009) and Gunalp and Dinçer ( 2010) depicted a positive one. Armey (1995) proposed an inverted U-shaped curve to study the effect of public spending on economic growth.…”

Section: Section 1: Effect Of Public Expenditure On Growth-positive Negative and Insignificantmentioning

confidence: 97%

Government Size and Economic Growth: An Empirical Examination of Selected Emerging Economies

Jain

Nagpal

Jain

2021

South Asian Journal of Macroeconomics and Public Finance

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The current study attempts to examine the linkage between government (public) spending and economic growth in the broader framework of selected South Asian Nations (SANs), BRICS and other emerging nations by using two sets of empirical modelling over the period 2007–2016 by using inverted U-shaped hypothesis, propounded by Armey curve (1995). The first set has employed system GMM technique to explore the presence of the Armey curve hypothesis using the square term of government size, while the second set has used the threshold regression using system GMM panel modelling to investigate the subsequent reversals (tipping point). The key findings signify the existence of an inverted U-shaped relationship for the selected data set of emerging nations and, therefore, support the Armey curve hypothesis. The projected threshold (tipping) levels (as a percentage of GDP) are 24.31% for the government total expenditures (GTotExp), 12.92% for consumption spending (GConExp) and 7.11% for investment spending (GInvExp). It has been observed that a rise in the public spending (size) resulted in a substantial increase (decrease) in the growth rate when the public spending was before (after) the optimal threshold level, indicating a non-monotonic association. The findings of the study also suggest a policy implication that public spending could only be a short-term measure to deal with crises in any nation, but not a long-term solution. JEL Classification: C23, C33, E60, E62, H00, H50, O40, O50

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“…The effect of government size on economic growth has become one of the frequently addressed issues in the debates and the relation between government expenditures and economic growth has been examined in the positive, negative and nonlinear direction. The studies by [7]- [18] found statistically significant negative relations between government size and economic growth.…”

Section: Literature Reviewmentioning

confidence: 96%

The Analysis of Visible Hand of Government: The Threshold Effect of Government Spending on Economic Growth

Aydın¹,

Akıncı²,

Yilmaz³

2016

IJTEF

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In this study, the role of government expenditures threshold value in the relationship between government spending and economic growth has been investigated for Turkish economy in period 1998:Q2-2015:Q2. At the first stage, government expenditures threshold value has been detected and after that government spending-economic growth relation has been examined using threshold autoregressive (TAR) model. The finding of this study is that, under the first regime which is below the threshold level, low government spending has significantly negative impact on economic growth. On the other hand, under the second regime which is above the threshold level, government spending has significantly positive effect on economic growth. This finding shows that rising government spending is an important factor to faster the economic growth process. Due to this effect, Turkey should follow a determined strategy to raise spending level above threshold value. Besides, the result of the study emphasizes that politicians and decision makers must take into account for this effect.

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Evidence on economic growth and government size

Cited by 26 publications

References 24 publications

Political Ideology and Economic Growth: Evidence From the French Democracy

Political Ideology and Economic Growth: Evidence From the French Democracy

Government Size and Economic Growth: An Empirical Examination of Selected Emerging Economies

The Analysis of Visible Hand of Government: The Threshold Effect of Government Spending on Economic Growth

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