Government Size and Economic Growth in Iran With Emphasis

مجله اقتصاد و توسعه کشاورزی

Article 2, Volume 23, Issue 1, April 2009   

Document Type: Research Article

DOI: 10.22067/jead2.v1388i1.2063

Authors

M. Zibaei^* ; Z. Mazaheri

Department of Agricultural Economics, University of Shiraz

Abstract

Abstract
Government size plays a vital role in the economic development process. Therefore, in this study, the existence of a non-linear relationship between government size and economic growth was investigated using the two-sector production function developed by Ram (1986). The data, covering 44 years (1961-2005), were collected from the Iranian Economic Information Center. Two classification of government size are examined as threshold variables. The results indicated that current government size in Iran has passed over the optimal government size. Thus, the government expenditure share in gross domestic product should be decrease. Also the existence of a non-linear effectiveness of government size was recognized.

Keywords

Economic growth; Government Size; Threshold regresion

References