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Analysis of the optimal size of the government consumption

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  • Josheski, Dushko
  • Lazarov, Darko
  • Koteski, Cane

Abstract

The aim of this paper is to investigate the size of the government in 12 OECD countries. Data are gathered from Penn Tables. Clustered robust OLS estimation techniques have been used. Also Panel estimation techniques have been applied, FE and RE estimation. The functional form is quadratic is been used, to determine the point where the size of the government is optimal. Government consumption has been used as a proxy variable for government size.

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File URL: http://mpra.ub.uni-muenchen.de/32983/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32983.

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Date of creation: 25 Aug 2011
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Handle: RePEc:pra:mprapa:32983

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Keywords: Government size; Clustered robust OLS; quadratic equation; Armey curve; Panel data; Fixed effect estimation; Random effects estimation; GLS ; Pooled OLS;

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  1. Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
  2. Bernhard Heitger, 2001. "The Scope of Government and its Impact on Economic Growth in OECD Countries," Kiel Working Papers 1034, Kiel Institute for the World Economy.
  3. Scully, Gerald W, 2003. " Optimal Taxation, Economic Growth and Income Inequality," Public Choice, Springer, vol. 115(3-4), pages 299-312, June.
  4. Philip J. Grossman, 1987. "The Optimal Size of Government," Development Research Unit Working Paper Series archive-06, Monash University, Department of Economics.
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