Nonlinear Effects of Changes in Government Expenditures Across Global Economies: Insights from a QNARDL Analysis

Rianmahardhika Sahid Budiharseno and Min-Joon Kim

SAGE Open, 2025, vol. 15, issue 2, 21582440251339918

Abstract: This study used the QNARDL model to examine how government expenditure affected economic growth in 92 countries during 1992 to 2021. Unlike traditional models, this study decomposes government expenditure into positive and negative changes, estimating their impacts across different growth quantiles. The QNARDL model provides more detailed information than linear models such as the threshold autoregressive model, panel threshold method, quadratic form, and data envelopment analysis. The findings reveal that both positive and negative government expenditure changes hamper economic growth at most quantiles, with only a few positive effects observed at certain quantiles. This study’s novel contribution lies in its methodological approach as it uses the QNARDL model to capture the nuanced and complex relationship between government expenditure and economic growth, providing crucial information for policymakers on the efficacy of fiscal policy across different economic conditions. JEL Classifications : C01, H50, H54, O40.

Keywords: economic growth; fiscal policy; government expenditure; nonlinear effect; panel data; QNARDL analysis (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:15:y:2025:i:2:p:21582440251339918

DOI: 10.1177/21582440251339918

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