The impact of government size on economic growth: a threshold analysis

Stylianos Asimakopoulos; Yiannis Karavias

doi:10.1016/j.econlet.2015.12.010

The impact of government size on economic growth: a threshold analysis

Stylianos Asimakopoulos, Yiannis Karavias

Economics

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Abstract

We examine the nature of the relationship between government size and economic growth and identify the optimal level of government size using a large dataset through a novel and very general non-linear panel Generalized Method of Moments approach. We show that this relationship is statistically significant above and below the optimal level, even after splitting our sample to developed and developing countries. Finally, we find an asymmetric impact of government size on economic growth in both developed and developing countries around the estimated threshold.

Original language	English
Pages (from-to)	65-68
Number of pages	4
Journal	Economics Letters
Volume	139
Early online date	29 Dec 2015
DOIs	https://doi.org/10.1016/j.econlet.2015.12.010
Publication status	Published - Feb 2016

Keywords

Government size
Economic growth
Dynamic threshold estimation

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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AB - We examine the nature of the relationship between government size and economic growth and identify the optimal level of government size using a large dataset through a novel and very general non-linear panel Generalized Method of Moments approach. We show that this relationship is statistically significant above and below the optimal level, even after splitting our sample to developed and developing countries. Finally, we find an asymmetric impact of government size on economic growth in both developed and developing countries around the estimated threshold.

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KW - Economic growth

KW - Dynamic threshold estimation

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DO - 10.1016/j.econlet.2015.12.010

M3 - Article

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VL - 139

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JO - Economics Letters

JF - Economics Letters

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The impact of government size on economic growth: a threshold analysis

Abstract

Keywords

UN SDGs

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