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Economic Growth and the Size and Structure of Government: Implications for New Zealand

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  • Dr. Arthur Grimes

Abstract

The work of Gwartney, Holcombe and Lawson (GHL, 1998) is cited in New Zealand debate to demonstrate that a larger government share of GDP is detrimental for economic growth. Their work is reassessed here. We find a number of omissions in their analysis lead to a considerable over- statement of the effect of government size on growth. More important for growth, according to other recent work, are the structures of government revenues and expenditures. The size and structure of New Zealand government flows are examined using recent IMF data. This analysis indicates that New Zealand has a relatively small government sector. However, the structures of both government revenues and expenditures warrant attention.

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File URL: http://128.118.178.162/eps/mac/papers/0310/0310016.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Macroeconomics with number 0310016.

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Date of creation: 21 Oct 2003
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Handle: RePEc:wpa:wuwpma:0310016

Note: Type of Document - pdf; prepared on Word 2000; to print on PC;
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Web page: http://128.118.178.162

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Keywords: Government size; growth; New Zealand;

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Cited by:
  1. Arthur Grimes, 2005. "Regional and Industry Cycles in Australasia: Implications for a Common Currency," Working Papers 05_04, Motu Economic and Public Policy Research.
  2. David C Maré, 2005. "Indirect Effects of Active Labour Market Policies," HEW 0509004, EconWPA.
  3. Shanaka Herath, 2010. "The Size of the Government and Economic Growth: An Empirical Study of Sri Lanka," SRE-Disc sre-disc-2010_05, Institute for the Environment and Regional Development, Department of Socioeconomics, Vienna University of Economics and Business.
  4. David C. Maré & Michelle Poland, 2005. "Defining Geographic Communities," Working Papers 05_09, Motu Economic and Public Policy Research.
  5. Arthur Grimes, 2005. "Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union," Macroeconomics 0509019, EconWPA.

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