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Optimal Size Of Government Spending. The Case Of European Union Member States

Author

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  • Mihai MutaÅŸcu
  • Marius MiloÅŸ

Abstract

The theme of public expenditure has been of great interest in the latest years. Focusing on government size, role of government and the efficiency of the public sector becomes an even more important issue nowadays when the financial crisis has covered severly almost all economies worlwide. The debate has as starting point the keynesian belief (state intervention overcomes recession periods) but also the division of the economy between the public and the private sector. Goods and services could be provided by the state, but many times the private sector seems to be more efficient. Using a specific econometrical analysis, the authors try to establish the optimal size of the public sector in both old and new member states of the European Union, a level that fosters economic growth and suggest that, following this point, GDP should be left in the hands of the private sector.

Suggested Citation

  • Mihai MutaÅŸcu & Marius MiloÅŸ, 2009. "Optimal Size Of Government Spending. The Case Of European Union Member States," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-45.
    • Handle: RePEc:alu:journl:v:1:y:2009:i:11:p:45
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    References listed on IDEAS

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    Cited by:

    1. Camilo Alvis & Cristian Castrillón, 2013. "Tamano óptimo del gasto público colombiano: una aproximación desde la teoría del crecimiento endógeno," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, December.
    2. Uchechi Shirley Anaduaka & Vivian Ikwuoma Nnetu & Stephen Ekene Aguegboh & David Iheke Okorie, 2016. "Relative Maxima of the Public Sector: A Comparative Study of Nigeria and Ghana," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(11), pages 575-589, November.
    3. Cosimo Magazzino & Francesco Forte & Lorenzo Giolli, 2022. "On the Italian public accounts' sustainability: A wavelet approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 943-952, January.
    4. NLOGA ETOUNDI, Joseph, 2024. "Public expenditure and optimal size of state In Cameroon from 1982 To 2023: the Armey Curve," MPRA Paper 122148, University Library of Munich, Germany.
    5. Szarowska Irena, 2013. "Relationship between government expenditure and output in the problematic regions in the European Union," Экономика региона, CyberLeninka;Федеральное государственное бюджетное учреждение науки «Институт экономики Уральского отделения Российской академии наук», issue 4 (36), pages 190-199.
    6. Alimi, R. Santos, 2014. "Does Optimal Government Size Exist for Developing Economies? The Case of Nigeria," MPRA Paper 56073, University Library of Munich, Germany.

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    More about this item

    Keywords

    public expenditure; economic growth; optimum level; public sector;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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