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Government Size and the Effect on Economic Growth in the EU?
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
2019 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The literature on the relationship between the size of government and the economic growthis full of contradictory findings. There are some scholars that claim to have found a negative relationship whilst others claim that the evidence presents no conclusion on whether the relationship is positive, negative or non-existent. This paper reviews the findings ofprevious research on this relationship and the conclusions that may could be drawn regarding this. Two fixed effects regressions of a panel data set are made in order to see what relationship can be found for the countries of EU, between the years of 2000 to 2017.Since the countries of EU are rich and have an established public sector, the findings of this study cannot be applied on poor countries with a small government size. The results of our regression is a negative effect, but if it works as evidence is still highly debatable. The findings may have been different if other control variables, statistical methods, time-periodor countries were used. The causality still remains highly questionable.

Place, publisher, year, edition, pages
2019.
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-160975OAI: oai:DiVA.org:umu-160975DiVA, id: diva2:1331123
Available from: 2019-06-26 Created: 2019-06-26 Last updated: 2019-06-26Bibliographically approved

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