Paper Information

Journal:   IRANIAN ECONOMIC RESEARCH   SPRING 2010 , Volume 14 , Number 42; Page(s) 189 To 207.
 
Paper:  GOVERNMENT SIZE AND ECONOMIC GROWTH IN IRAN: A THRESHOLD REGRESSION APPROACH
 
Author(s):  DEJPASAND FARHAD, GOUDARZI HOSEIN
 
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Abstract: 

A great deal of literature has examined the relationship between government size and economic growth. To investigate this relationship, this study applies a threshold regression model to test whether the Army curve exists in Iran as an oil exporting country. Five classification of government size include total government expenditure/GDP, government investment expenditure/GDP and government consumption expenditure/GDP, government expenditure financed by oil /GDP and government expenditure financed by tax/GDP. The result reveal that all classification except government expenditure finance by tax have a threshold effect and economic growth is maximum when government expenditure is between 23 to 30 percent of GDP.

 
Keyword(s): GOVERNMENT SIZE, ECONOMIC GROWTH, ARMEY CURVE
 
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