Government Consumption, Government Debt and Economic Growth by Shahrzad Ghourchian, Hakan Yilmazkuday published by Review of Development Economics (2/2020).
This paper compares the e¤ects of government consumption and government debt on economic growth by using data from 83 countries, including both developed and developing markets, over the period between 1960 and 2014. Linear regressions reveal that the negative e¤ects of government consumption are relatively higher than the negative e¤ects of government debt. A nonlinear investigation further suggests that the restrictions on government expenditure to prevent negative growth are shown to be more important for countries with lower trade openness, lower in ation, or higher nancial depth, whereas the restrictions on government debt are shown to be more important for countries with higher trade openness, lower in ation or higher nancial depth.
