GOVERNMENT SIZE AND ECONOMIC GROWTH IN TURKEY: A THRESHOLD REGRESSION ANALYSIS
PRAGUE ECONOMIC PAPERS, cilt.26, sa.2, ss.142-154, 2017 (SSCI, Scopus)
- Yayın Türü: Makale / Tam Makale
- Cilt numarası: 26 Sayı: 2
- Basım Tarihi: 2017
- Doi Numarası: 10.18267/j.pep.600
- Dergi Adı: PRAGUE ECONOMIC PAPERS
- Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
- Sayfa Sayıları: ss.142-154
- Açık Arşiv Koleksiyonu: AVESİS Açık Erişim Koleksiyonu
- Hacettepe Üniversitesi Adresli: Evet
Özet
We examine the relationship between the government size and economic growth by using threshold regression model and quarterly data over the period 1998:1-2015:1 for Turkey. Our results provide a strong evidence for the existence of a non-linear relationship. The estimated threshold levels, as a percentage of GDP, are 16.5 for the government total expenditures, 12.6 for consumption expenditures and 3.9 for investment expenditures. We find that an increase in the government size leads to a significant rise (decline) in economic growth rate when the government size is below (above) the threshold level, confirming the predictions of Armey curve. Our findings have a clear policy implication: since the realized government consumption and total expenditures are well above the estimated threshold levels, a reduction in the government size would boost the growth rate.