The shifting Scully curve: international evidence from 1871 to 2016

Livio Di Matteo and Fraser Summerfield

Applied Economics, 2020, vol. 52, issue 39, 4263-4283

Abstract: Scully curves estimating growth-maximizing public-sector size are constructed using panel data covering 17 industrialized nations from 1870–2016. Results suggest that government expenditure-to-GDP ratios between 24% and 32% were historically growth maximizing. Instrumental variable estimates support the quadratic Scully curve relationship as causal over this period. We allow for a shifting Scully curve and find that the economic growth-maximizing size changed throughout history, from 11% pre-WWI to 21% post-WWII and 41% following the OPEC crisis. The Scully curve disappears after the mid-1990s suggesting a structural change in the relationship between central government expenditure and economic growth.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2020.1733479 (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:taf:applec:v:52:y:2020:i:39:p:4263-4283

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2020.1733479

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().