Testing the validity of the BARS curve for Turkey
This study has two main aims: to test the validity of the BARS curve in Turkey for the period 1974-2016 and to estimate the optimal government size for that period and compare it with the current situation. It uses the Autoregressive Distributed Lag bounds test and quadratic equation method...
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| Format: | Article |
| Language: | English |
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Faculty of Economics, Belgrade
2022-01-01
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| Series: | Ekonomski Anali |
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| Online Access: | http://www.doiserbia.nb.rs/img/doi/0013-3264/2022/0013-32642232153D.pdf |
| Summary: | This study has two main aims: to test the validity of the BARS curve in
Turkey for the period 1974-2016 and to estimate the optimal government size
for that period and compare it with the current situation. It uses the
Autoregressive Distributed Lag bounds test and quadratic equation methods.
The empirical findings of the study confirm the validity of the BARS curve
by providing strong evidence for the existence of an inverted U-shaped
long-run relationship between government size and economic growth. Unlike
many previous studies that use a single proxy measure for government size,
this study uses all available fundamental indicators and their
sub-components. The empirical results show that for the period studied all
proxy measures of government size exceed the optimal except for total
central government budget expenditure and defence expenditure. Therefore,
decreasing the size of the government, other than for these two indicators,
will increase economic growth in the long run. |
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| ISSN: | 0013-3264 1820-7375 |