Optimal government size and economic growth in Spain. Evidences through the Armey Curve (1980-2016).
Keywords:Armey Curve, economic growth, public expenditure, government size
This study analyzes the effect of public expenditure on economic growth for the Spanish economy, in the period between 1980 and 2016. The Armey curve is used as an analytical tool to describe the relationship between the two variables indicated. The two objectives of this study are check if there is a quadratic relationship of this kind between the two variables for the Spanish economy, as predicted by the model, and there, calculate their optimum. The empirical findings indicate the existence of a significant relationship inverted U-shaped between the two variables in the Spanish economy, obtaining an optimal public expenditure in Spain of 40.07% of GDP, 5.07% lower than the size of the public sector by 2016. Based on these results, an economic policy proposal could be the need to reduce the percentage of public expenditure with the goal of attaining greater efficiency in the Spanish economy.
How to Cite
Authors wishing to include figures, tables, or text passages that have already been published elsewhere are required to obtain permission from the copyright owner(s) for both the print and online format and to include evidence that such permission has been granted when submitting their papers. Any material received without such evidence will be assumed to originate from the authors.