Abstract

CASTRO, Conceição. The size of public sector and economic growth: a non-linear realationship in the EU 15?. Economia Global e Gestão [online]. 2009, vol.14, n.3, pp.61-75. ISSN 0873-7444.

Member States of the European Union have been concerned to reduce the dimension of general government in the economy, along with becoming more efficient in order to promote economic growth. In this article, the relations between the public expenditures and the economic growth are analyzed in 14 Member States of the European Union of the 15, in order to determine the optimal size of the government, having for theorical ground the Armey Curve. The results for the period 1965-2007, suggest a size of government maximizing the economic growth of 47.37% and 22.17% of GDP, when measured by total public expenditure and public consumption, respectively.

Keywords : Optimal Dimension of Public Administration; Economic Growth; Armey Curve.

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