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Unemployment and government size: Is there any credible causality?

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  • Dimitris Christopoulos
  • Efthymios Tsionas

Abstract

This paper investigates the Abrams curve, that is the relationship between government size and unemployment, for 10 European countries over the period 1961-1999. This paper uses credible causality inferences that do not depend on the stationarity or cointegration properties of the data. The results support the idea that there is an Abrams curve but the relation between government size and the unemployment rate is not likely to be simple.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 9 (2002)
Issue (Month): 12 ()
Pages: 797-800

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Handle: RePEc:taf:apeclt:v:9:y:2002:i:12:p:797-800

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References

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  1. Francesco Daveri & Guido Tabellini, . "Unemployment, Growth and Taxation in Industrial Countries," Working Papers 122, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  2. Hiro Y. Toda & Peter C.B. Phillips, 1991. "Vector Autoregression and Causality," Cowles Foundation Discussion Papers 977, Cowles Foundation for Research in Economics, Yale University.
  3. Tsionas, Efthymios G., 2001. "P-STAR analysis in a converging economy: the case of Greece," Economic Modelling, Elsevier, vol. 18(1), pages 49-60, January.
  4. Abrams, Burton A, 1999. " The Effect of Government Size on the Unemployment Rate," Public Choice, Springer, vol. 99(3-4), pages 395-401, June.
  5. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
  6. Efthymios Tsionas & George Halkos, 2000. "Posterior Analysis of Environmental Damage Evaluation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(3), pages 371-390.
  7. Razzolini, Laura & Shughart, William F, II, 1997. " On the (Relative) Unimportance of a Balanced Budget," Public Choice, Springer, vol. 90(1-4), pages 215-33, March.
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Cited by:
  1. Siyan Wang & Burton A. Abrams, 2011. "The Effect of Government Size on the Steady-State Unemployment Rate: A Dynamic Perspective," Working Papers 11-12, University of Delaware, Department of Economics.
  2. Horst Feldmann, 2006. "Government Size and Unemployment: Evidence from Industrial Countries," Public Choice, Springer, vol. 127(3), pages 443-459, June.
  3. Thirunaukarasu Subramaniam & Ahmad Zubaidi Baharumshah, 2011. "Unemployment And Speed Of Adjustment In Asean-3 Economies: A Cointegration Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 56(03), pages 327-347.
  4. Burton A. Abrams & Siyan Wang, 2007. "Government Outlays, Economic Growth and Unemployment: A VAR Model," Working Papers 07-13, University of Delaware, Department of Economics.

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