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Government consumption, government debt and economic growth
Author(s) -
Ghourchian Shahrzad,
Yilmazkuday Hakan
Publication year - 2020
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12661
Subject(s) - economics , openness to experience , consumption (sociology) , government debt , inflation (cosmology) , government (linguistics) , debt , monetary economics , internal debt , government expenditure , public finance , government revenue , external debt , macroeconomics , international economics , psychology , social psychology , social science , linguistics , physics , philosophy , sociology , theoretical physics
This paper compares the effects of government consumption and government debt on economic growth using data from 83 countries, including both developed and developing markets, over the period from 1960 to 2014. Linear regressions reveal that the negative effects of government consumption are relatively higher than the negative effects of government debt. A nonlinear investigation further suggests that the restrictions on government expenditure to prevent negative growth are more important for countries with lower trade openness, lower inflation, or greater financial depth, whereas the restrictions on government debt are shown to be more important for countries with higher trade openness, lower inflation or greater financial depth.