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

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

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.

Details

Original languageEnglish
Pages (from-to)65-68
Number of pages4
JournalEconomics Letters
Volume139
Early online date29 Dec 2015
Publication statusPublished - Feb 2016

Keywords

  • Government size , Economic growth, Dynamic threshold estimation