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Fiscal Decentralisation and Economic Growth: A Bayesian Model Averaging Approach

Philip Bodman, Kelly-Ana Heaton and Andrew Hodge ()
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Kelly-Ana Heaton: MRG - School of Economics, The University of Queensland
Andrew Hodge: MRG - School of Economics, The University of Queensland

No 3509, MRG Discussion Paper Series from School of Economics, University of Queensland, Australia

Abstract: This article re-examines the relationship between fiscal decentralisation and economic growth by employing Bayesian model averaging (BMA). BMA enables the consideration of a range of measures of fiscal decentralisation and allows the incorporation of model uncertainty into the empirical methodology. Posterior coefficient estimates suggest that not straightforward relationship exists between fiscal decentralisation and economic growth based on time-series data for Australia.

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