The Government Expenditure and Economic Growth: The Case of Iran
Abstract
The Authors examine the effects of government expenditure on economic growth in Iran, using annual data for the period of 1973-2003.
In this paper, they lookat the offects of human, physical capital, and government budget on GDP. In the model developed in this paper, accumulation of human capital is dependent on physical. Human capital, and government budget as well.
The result indicate that government expenditure, consumption and capital expenditures both are positive and significant on economic growth. The capital expenditure can have positive effect for two years, but consumption expenditure can have effect on the same year. On the other hand, ratio of private investment to capital stock can have positive effects on economic growth and it's role is stronger than the government expenditure.
JEL Classification: H11, H50, O41
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