concluded that in all three countries, the government size is the Granger cause of national income growth in short term (all three countries) and in long term (Ireland and UK). They used the ratio of government expenditures to GNP as an indicator of the government size. By investigating the trend of government expenditures and economic growth in 2-3 past decades of the United States and 15 selected countries within European Union, Mitchell (2005) concluded that extension of government expenditures would not necessarily tend to improve economic activities. Romero-Ávila and Strauch (2008) showed that for 15 European countries: if the government size is measured by share of total expenditures, consumption expenditures, government revenues, or direct taxes, its effect on economic growth would be negative; but, if the government size is measured by total public investment as a share of GDP, it would bring about positive effects. Wu et al. (2010) investigate the causal relationship between government size and economic growth in 182 countries. Using panel Granger causality and considering eight sample countries (all countries, OECD countries, non-OECD countries, high-income countries, middle-income countries, countries, high-corruption countries and low-corruption countries), they concluded that between government size and economic growth there is causality (except low-income countries).
concluded that in all three countries, the government size is the Granger cause of national income growth in short term (all three countries) and in long term (Ireland and UK). They used the ratio of government expenditures to GNP as an indicator of the government size. By investigating the trend of government expenditures and economic growth in 2-3 past decades of the United States and 15 selected countries within European Union, Mitchell (2005) concluded that extension of government expenditures would not necessarily tend to improve economic activities. Romero-Ávila and Strauch (2008) showed that for 15 European countries: if the government size is measured by share of total expenditures, consumption expenditures, government revenues, or direct taxes, its effect on economic growth would be negative; but, if the government size is measured by total public investment as a share of GDP, it would bring about positive effects. Wu et al. (2010) investigate the causal relationship between government size and economic growth in 182 countries. Using panel Granger causality and considering eight sample countries (all countries, OECD countries, non-OECD countries, high-income countries, middle-income countries, countries, high-corruption countries and low-corruption countries), they concluded that between government size and economic growth there is causality (except low-income countries).
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