This paper explores the relation between the governmental expenditures on the cultural sector and the performance of the economy in the UK. In welfare economies it is the government’s role to shorten the effects of the occurring market failures. It is shown that in the cultural sector, two market failures, the high fix cost and the productivity lag are appearing. In order to ease these effects the government intervening into the market mechanisms by giving grants and subsidies to the stakeholders. In the empirical part a time series analysis is executed between the GDP, the total governmental expenditures and the governmental expenditures on the cultural services on a 60 years interval in the UK. It is shown that the three variables have the same order of integration, they move together over time, furthermore cointegration was detected between them. With Granger causality test it was proven that there is a bidirectional informal connection between the performance of economy and the government’s cultural expenditures.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hj-15917 |
| Date | January 2011 |
| Creators | Gábor, Sömjéni |
| Publisher | Högskolan i Jönköping, Internationella Handelshögskolan |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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