International Conference on Eurasian Economies
18-20 June 2018 – Tashkent, UZBEKISTAN
Paper detail
Paper ID : 2212
Status : Paper published
Language : Turkish
Topic : Macroeconomics
Presenter: Prof. Dr. Menşure Kolçak
Session : 1C Makroekonomi
Do Government Expenditures Subject to Law of Diminishing Returns? A Panel Data Application
Kamu Harcamaları Azalan Verimler Yasasına Mı Tabi? Bir Panel Veri Uygulaması
- Prof. Dr. Menşure Kolçak (Atatürk University, Türkiye)
- Asst. Prof. Dr. Ali Yasin Kalabak (Van Yüzüncü Yıl University, Türkiye)
Abstract
The effect of government expenditure on economic growth has attracted attention of economist for long time. In this context, this paper aims to understand that government expenditure subjects to whether constant, decreasing or increasing yield. For this reason, countries were classified as with low government expenditure, medium government expenditure and high government expenditure, and were added into empirical analysis in the paper. The number of countries included in the analysis is 138 and the analysis covers the period between years 1980 and 2016. In this context, empirical analysis consists of fixed effect model, random effect model, hausman test and unbalanced panel data technique was applied. According to results of analysis, when government expenditure increases as quantitative, it’s effect on economic growth decreases but it still affects economic growth positively. To make public expenditures lately subject to law of diminishing returns, it may come into question that public expenditures is canalized to technology intensive areas. In order to increase productivity in the public expenditures and to shift out diminishing returns, level of spendings on human capital can be increased.
JEL codes:
Kolçak, Menşure, Kalabak, Ali Yasin (2018). "Do Government Expenditures Subject to Law of Diminishing Returns? A Panel Data Application" in Proceedings of International Conference of Eurasian Economies 2018, pp.249-256, Tashkent, UZBEKISTAN.
DOI: https://doi.org/10.36880/C10.02212
