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Government Size and Economic Growth: Time-Series Evidence for the United Kingdom, 1830-1993

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Abstract

This study considers the long-run relationship between government expenditure and economic growth for the United Kingdom over the period 1830 to 1993. The causality analysis allows for the effects of exports, and for the presence of complex structural breaks in the data. The results support the export-led growth hypothesis. Although support for Wagner’s Law is sensitive to the choice of sample period, there is evidence that GDP growth Granger-causes the share of government spending in GDP indirectly through exports’ share of GDP during the period 1870-1930.

Suggested Citation

  • Wing Yuk, 2005. "Government Size and Economic Growth: Time-Series Evidence for the United Kingdom, 1830-1993," Econometrics Working Papers 0501, Department of Economics, University of Victoria.
  • Handle: RePEc:vic:vicewp:0501
    Note: ISSN 1485-6441
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    File URL: http://www.uvic.ca/socialsciences/economics/assets/docs/econometrics/ewp0501.pdf
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    Cited by:

    1. Zareen, Shumaila & Qayyum, Abdul, 2014. "An Analysis of the Impact of Government Size on Economic Growth of Pakistan: An Endogenous Growth," MPRA Paper 56139, University Library of Munich, Germany.
    2. Magazzino, Cosimo, 2010. "Wagner's law and Italian disaggregated public spending: some empirical evidences," MPRA Paper 26662, University Library of Munich, Germany.
    3. Alina Cristina Nuta & Florian Marcel Nuta & Viorica Chirila & Angela Roman & Andy Corneliu Pusca, 2015. "Testing the Relationship between Public Expenditure and Economic Growth in Romania," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(4), pages 86-102, August.
    4. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.

    More about this item

    Keywords

    Wagner's law; Granger causality; size of government; structural breaks;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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