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

Stylianos Asimakopoulos, Yiannis Karavias

Research output: Contribution to journalArticlepeer-review

46 Citations (Scopus)
233 Downloads (Pure)


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 languageEnglish
Pages (from-to)65-68
Number of pages4
JournalEconomics Letters
Early online date29 Dec 2015
Publication statusPublished - Feb 2016


  • Government size
  • Economic growth
  • Dynamic threshold estimation


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