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Does too much government investment retard economic development of a country?

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  • Abdullah Yavas

Abstract

The purpose of this paper is to understand how the effect of the government size per capita on the steady-state level of output and on the growth rate differs between LDC’s and developed countries. It is shown that an increase in government size will increase the steady-state level of output if the economy is at a low steady-state (underdeveloped), and will decrease the steady-state level of output if the economy is at a high steady-state (developed).

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

Volume (Year): 25 (1998)
Issue (Month): 4 (September)
Pages: 296-308

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Handle: RePEc:eme:jespps:v:25:y:1998:i:4:p:296-308

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Related research

Keywords: Central government; Developing countries; Development; Economic growth;

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Cited by:
  1. Dizaji, S.F., 2012. "Exports, government size and economic growth (Evidence from Iran as a developing oil-export based economy)," ISS Working Papers - General Series 535, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  2. Magazzino, Cosimo & Forte, Francesco, 2010. "Optimal size of government and economic growth in EU-27," MPRA Paper 26669, University Library of Munich, Germany.
  3. J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers 10-10, Carleton University, Department of Economics.
  4. repec:hal:cesptp:halshs-00654363 is not listed on IDEAS
  5. repec:hal:journl:halshs-00654363 is not listed on IDEAS
  6. Susana Martins & Francisco José Veiga, 2013. "Government size, composition of public expenditure, and economic development," NIPE Working Papers 17/2013, NIPE - Universidade do Minho.
  7. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.
  8. Davies, Antony, 2009. "Human development and the optimal size of government," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(2), pages 326-330, March.

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