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Endogenous Growth Testing In The European Union And Developing Countries: Taxation, Public Expenditure And Growth

In endogenous growth models, in contrast to the neoclassical growth models,
government expenditure and taxation have an effect on the long run growth rate. In
this thesis I examine whether the empirical evidence support the predictions of
endogenous growth models or the neoclassical growth models in relation to fiscal
policy. For this purpose I use panel data for fifteen European Union (EU) member and
thirty-three developing countries between the years 1970 and 1999. I specifically test
the following two propositions. The first proposition states that distortionary taxation
decreases growth while non-distortionary taxation does not. The second, states that
productive government expenditure increases growth while non-productive
expenditure does not. The empirical results are quite different between European Union countries and developing countries. The results do not support endogenous
growth especially for developing countries.

Identiferoai:union.ndltd.org:METU/oai:etd.lib.metu.edu.tr:http://etd.lib.metu.edu.tr/upload/1112127/index.pdf
Date01 January 2003
CreatorsDerin, Pinar
ContributorsTansel, Aysit
PublisherMETU
Source SetsMiddle East Technical Univ.
LanguageEnglish
Detected LanguageEnglish
TypeM.S. Thesis
Formattext/pdf
RightsTo liberate the content for public access

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