2006–2010

Growth Effects of Government Expenditure and Taxation in Rich Countries. A Reply

Reprint No. 2006:1

Author(s): Stefan Fölster and Magnus HenreksonYear: 2006 Title: European Economic Review Volume (No.): 50 (1) Pages: 219–221


Agell et al. (2005) criticise our earlier findings (Fölster and Henrekson 2001) of a robust negative relationship between government size and economic growth for an extended sample of rich countries. In this short paper it is argued that their critique is unfounded. Most importantly, the critique does not deal with the main result of the original study, namely that the most complete specifications for assessing the relationship between government expenditure and growth in rich countries are robust even according to stringent extreme bounds criteria.


Reference:
Fölster, Stefan and Magnus Henrekson (2006), "Growth Effects of Government Expenditure and Taxation in Rich Countries. A Reply". European Economic Review 50(1), 219–221.

Magnus Henrekson

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magnus.henrekson@ifn.se

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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