Government size, public debt and real economic growth: a panel analysis
Abstract
Purpose
The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world.
Design/methodology/approach
The paper utilizes the fixed‐effects and random‐effects techniques to estimate the panel regressions.
Findings
The results indicate that both the size of government and the extent of government indebtedness have negative effects on economic growth.
Practical implications
The findings suggest that the authorities ought to take the necessary steps to curtail excessive government spending and public debts, in order to promote economic growth.
Originality/value
The contribution of the paper is its application of the fixed‐ and random‐effects techniques in modeling the relation of real economic growth to the size of government and public debt, for a panel of 175 countries around the world.
Keywords
Citation
DiPeitro, W.R. and Anoruo, E. (2012), "Government size, public debt and real economic growth: a panel analysis", Journal of Economic Studies, Vol. 39 No. 4, pp. 410-419. https://doi.org/10.1108/01443581211255620
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited