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Optimal government size and economic growth in France (1871-2008) : An explanation by the State and market failures

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  • François Facchini

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Mickaël Melki

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper analyses the effect of public expenditure on economic growth from both a theoretical and an empirical point of view. Given that the economic literature supplies numerous and conflicting views on the topic, the article offers a framework combining both theories of market failures and State failures to account for an inverted U-shapped relation between government size and GDP growth. The empirical contribution is to provide evidence through a long time-series analysis of the existence of such a relation on the period 1871-2008 for France, which offers one of the longest stable democratic periods to analyse.

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  • François Facchini & Mickaël Melki, 2011. "Optimal government size and economic growth in France (1871-2008) : An explanation by the State and market failures," Post-Print halshs-00654363, HAL.
    • Handle: RePEc:hal:journl:halshs-00654363
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00654363
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    More about this item

    Keywords

    Public spending; public expenditure; government size; BARS curve; Armey curve; economic growth; market failure; State failure; France.; France; Dépenses publiques; taille optimale de l'Etat; courbe d'Armey; croissance économique; défaillances de l'Etat et du marché.;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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