Economic Growth and the Public Sector: A Comparison of Canada and Italy, 1870-2013

Livio Di Matteo and T. Barbiero
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T. Barbiero: Rimini Centre for Economic Analysis; Ryerson University, Canada

Working Paper series from Rimini Centre for Economic Analysis

Abstract: There is considerable evidence that the size of the public sector can influence an economy's rate of economic growth. We investigate public sector spending of central governments and economic performance in two G7 countries over the long-term, Canada and Italy. Their economic performance has diverged in the last 25 years and it is worth investigating whether the size of government was a contributing factor. We find that in both the case of Canada and Italy the size of central government spending directly affects the performance of their economies in an inverse U-shaped relationship known as a Scully/BARS Curve. These results suggest that along with modifying current central government size, other levels of governments may need to shrink their own spending.

Date: 2018-02
New Economics Papers: this item is included in nep-ecm, nep-ets and nep-mac
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Journal Article: Economic Growth and the Public Sector: A Comparison of Canada and Italy, 1870-2013 (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:18-08

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