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Can Budget Deficits Financing, Crowed Out Private Sector? Comparative Study of the Cases of Iran and Algeria

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  • Zahra Karimi Takanlou

    (Faculty of Economics, Management and business, Tabriz University, Tabriz, Iran.)

Abstract

This paper develops an analysis of budget deficit financing in terms of a crowding out or crowding in effect on the activity of the private sector for the economies of Iran and Algeria as two MENA countries (because of its economic structures (dependence on oil revenue)) during the period 1970-2012 by using Cointegration and Vector Error Correction approaches. The analysis confirms the existence of a crowding out effect in Algeria and a crowding in effect in Iran.

Suggested Citation

  • Zahra Karimi Takanlou, 2014. "Can Budget Deficits Financing, Crowed Out Private Sector? Comparative Study of the Cases of Iran and Algeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 18(3), pages 1-25, Autumn.
    • Handle: RePEc:eut:journl:v:18:y:2014:i:3:p:1
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    References listed on IDEAS

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    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    3. Bernheim, B Douglas, 1989. "A Neoclassical Perspective on Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 55-72, Spring.
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    Cited by:

    1. Adeniyi, Oluwatosin & Adekunle, Wasiu & Orekoya, Samuel, 2018. "Non-linear Relation between External Debt and Economic Growth in Nigeria: Does the Investment Channel Matter?," MPRA Paper 99975, University Library of Munich, Germany, revised 07 Apr 2019.
    2. Jariani, Farzaneh, 2021. "The Crowding Out and Crowding In Effects of the Government Fiscal Policy on the Real Estate Investment and Public Prosperity in Iran," MPRA Paper 105506, University Library of Munich, Germany.

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