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The Economic Consequences of Government Spending in South Korea

Author

Listed:
  • Myeong Hwan Kim

    (Purdue University Fort Wayne)

  • Yongseung Han

    (University of North Georgia)

  • Heather L.R. Tierney

    (Purdue University Fort Wayne)

  • Eréndira Yareth Vargas López

    (University of Colima)

Abstract

This paper sheds light on the relationship between government expenditures and economic growth for South Korea. Using annual data from 1953 to 2016, this paper does find there to be an inverted U-shaped relationship between government expenditures and the growth rate of real GDP and between private expenditures and the growth rate of real GDP for South Korea. This study shows that there is an optimal level of government expenditure ratio, private expenditure ratio, and total expenditure ratio, which promotes economic growth for South Korea, but there is a decline in economic growth once this optimal level is reached.

Suggested Citation

  • Myeong Hwan Kim & Yongseung Han & Heather L.R. Tierney & Eréndira Yareth Vargas López, 2020. "The Economic Consequences of Government Spending in South Korea," Economics Bulletin, AccessEcon, vol. 40(1), pages 308-315.
    • Handle: RePEc:ebl:ecbull:eb-19-00552
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I1-P28.pdf
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    References listed on IDEAS

    as
    1. Beraldo, Sergio & Montolio, Daniel & Turati, Gilberto, 2009. "Healthy, educated and wealthy: A primer on the impact of public and private welfare expenditures on economic growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 946-956, December.
    2. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    3. John Y. Campbell & N. Gregory Mankiw, 1989. "Consumption, Income, and Interest Rates: Reinterpreting the Time Series Evidence," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 185-246, National Bureau of Economic Research, Inc.
    4. repec:fth:harver:1435 is not listed on IDEAS
    5. Livio Di Matteo & Fraser Summerfield, 2018. "The Shifting Scully Curve: International Evidence from 1870 to 2013," Working Paper series 18-01, Rimini Centre for Economic Analysis.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Coayla, Edelina, 2021. "The Optimal Size of Government and the Armey Curve: A Review of Empirical Evidence," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 28(1).

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    More about this item

    Keywords

    Rahn Curve; Wagner's Law; Public Spending; Public Expenditure; Economic Growth;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • H1 - Public Economics - - Structure and Scope of Government

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