Government Spending in A Dynamic Model of Endogenous Growth, with Application to the State of Kuwait

Khalifa H. Ghali; Naief H. Al-Mutairi

Article Details

Government Spending in A Dynamic Model of Endogenous Growth, with Application to the State of Kuwait

Authors:

Khalifa H. Ghali | Naief H. Al-Mutairi

Publisher:

Kuwait University

Journal:

Arab Journal of Administrative Sciences Vol.9 Issue 3, pp.419-439

Document Type:

Article

Publication Date:

1/2002

Document Language:

English

Document ID (Org No.):

2001943463

pISSN:

2957-3521

Keywords:

Abstract:

 This paper extends Barro's (1990) endogenous growth model to a dynamic vector error-correction model in order to test for the existence and direction of causality between government expenditures and economic growth and, hence, discriminate between alternative theoretical hypotheses. The question that we address is whether changes in government expenditures lead to changes in economic growth or whether they are simply following the growth of output generated elsewhere. Using data on Kuwait, we were able to identify both direct as well as indirect causal links between the variables, a result that the existing literature could not achieve because of the common use of a single growth equation. In particular; we found that, while output growth has a direct impact on government expenditures, government investment has an indirect impact on economic growth manifested through its own impact on private investment.

Article Details

Government Spending in A Dynamic Model of Endogenous Growth, with Application to the State of Kuwait

Authors:

Khalifa H. Ghali | Naief H. Al-Mutairi

Publisher:

Kuwait University

Journal:

Arab Journal of Administrative Sciences Vol.9 Issue 3, pp.419-439

Document Type:

Article

Publication Date:

1/2002

Document Language:

English

Document ID (Org No.):

2001943463

pISSN:

2957-3521

Endogenous Growth

Government Spending

Unit Root Testing

Cointegration

Causality

Vector Error-Correction Modeling

Issues

Article Details

Government Spending in A Dynamic Model of Endogenous Growth, with Application to the State of Kuwait

Authors: Khalifa H. Ghali | Naief H. Al-Mutairi

Publisher: Kuwait University

Journal: Arab Journal of Administrative Sciences Vol.9 Issue 3, pp.419-439

Document Type: Article

Publication Date: 1/2002

Document Language: English

Document ID (Org No.): 2001943463

pISSN: 2957-3521

Endogenous Growth

Government Spending

Unit Root Testing

Cointegration

Causality

Vector Error-Correction Modeling

Issues

Authors:

Khalifa H. Ghali | Naief H. Al-Mutairi

Publisher:

Kuwait University

Journal:

Arab Journal of Administrative Sciences Vol.9 Issue 3, pp.419-439

Document Type:

Article

Publication Date:

1/2002

Document Language:

English

Document ID (Org No.):

2001943463

pISSN:

2957-3521