Measuring Government Growth in the Canadian Provinces: Decomposing Real Growth and Deflator Effects

Louis M. Imbeau, François Pétry, Jean Crête, Geneviève Tellier and Michel Clavet

Canadian Public Policy, 2001, vol. 27, issue 1, 39-52

Abstract: In this paper, we argue that, when measuring government growth, we should distinguish among three growth phenomena: growth resulting from the broader scope of government activity, referred to as real growth; growth that results from higher costs of providing government goods and services, referred to as deflator effect; and growth in the simple ratio of government expenditure to gross domestic product (GDP), nominal growth, which is due to the combined impact of real growth and deflator effect. Using data on provincial government spending, we show that, over the 1971-95 period, there has been no real growth in three provinces and that there has been a substantial deflator effect on provincial government growth in all ten provinces.

Date: 2001
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