Government spending and economic growth in SAARC: evidence from panel cointegration

Rudra P. Pradhan

International Journal of Economic Policy in Emerging Economies, 2011, vol. 4, issue 1, 78-94

Abstract: The study examines the nexus between government spending and economic growth in the seven SAARC countries, namely Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, for the period 1970-2007. Using panel cointegration and panel causality, the paper finds that government spending and economic growth is cointegrated, indicating the existence of long run equilibrium relationship between them. It also confirms the presence of bidirectional causality between government spending and economic growth, both in the short run and long run, except Pakistan and Sri Lanka. The implication of this paper is that increased government spending is both cause and consequence of increased economic growth.

Keywords: government expenditure; economic growth; panel cointegration; Bangladesh; Bhutan; India; Maldives; Nepal; Pakistan; Sri Lanka. (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.inderscience.com/link.php?id=38874 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijepee:v:4:y:2011:i:1:p:78-94

Access Statistics for this article

More articles in International Journal of Economic Policy in Emerging Economies from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().