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Asymmetries in the Growth of Governments

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  • Gabriella Legrenzi

    ()
    (Keele University, Department of Economics)

Abstract

The growth of governments has traditionally been modelled within a welfare-driven context, where citizens/taxpayers increase their demand for publicly-provided goods and services in response to economic growth. However, the underlying linear approach does not consider the crisis intervention function of government spending that increases following contractions, rather than expansions, in domestic income. Our results point to a consistent counter-cyclical use of non-systematic government consumption expenditure.We also provide evidence of an upward bias in both discretionary and non-systematic government spending that can help explain the relevant growth of the Italian public sector.

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Bibliographic Info

Paper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2005/03.

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Length: 15 pages
Date of creation: Mar 2005
Date of revision:
Handle: RePEc:kee:kerpuk:2005/03

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Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
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Web page: http://www.keele.ac.uk/depts/ec/cer/
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Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
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Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm

Related research

Keywords: Government spending; economic growth; automatic and discretionary fiscal policy.;

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