Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data

Devran Şanlı

doi:10.25229/beta.1206552

EN

Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data

Abstract

This study aims to empirically test the Armey Curve hypothesis (optimal government size) for Turkey with panel data consisting of 81 provinces and 17 years. In this context, a quadratic model has been established in which economic growth is the dependent variable, and public expenditures are the independent variable. AMG estimates obtain the optimal size of public expenditures. The results indicate that the optimal level of public expenditures is 25.2%. Moreover, province-specific findings provide that the Armey curve is valid in 16 provinces, and the critical point of the curve takes values ranging from 12%(Istanbul) to 46%(Elazig). Considering the average volume of public expenditures is 31.6% throughout the panel, it is concluded that the expenditures exceed the optimal level. These results show that public expenditures are in the region of diminishing returns. Therefore, in order to maximize the growth rate, public expenditures should be reduced to an optimal level.

Keywords

Optimal Public Expenditures, Economic Growth, Armey Curve, Panel AMG.

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Details

Primary Language

English

Subjects

Business Administration

Journal Section

Research Article

Authors

Devran Şanlı ^*
0000-0003-4106-3799
Türkiye

Publication Date

December 31, 2022

Submission Date

November 17, 2022

Acceptance Date

December 25, 2022

Published in Issue

Year 2022 Volume: 7 Number: 2

DOI

https://doi.org/10.25229/beta.1206552

IZ

https://izlik.org/JA42RK46NY

APA

Şanlı, D. (2022). Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data. Bulletin of Economic Theory and Analysis, 7(2), 425-443. https://doi.org/10.25229/beta.1206552

AMA

1.Şanlı D. Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data. Beta. 2022;7(2):425-443. doi:10.25229/beta.1206552

Chicago

Şanlı, Devran. 2022. “Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data”. Bulletin of Economic Theory and Analysis 7 (2): 425-43. https://doi.org/10.25229/beta.1206552.

EndNote

Şanlı D (December 1, 2022) Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data. Bulletin of Economic Theory and Analysis 7 2 425–443.

IEEE

[1]D. Şanlı, “Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data”, Beta, vol. 7, no. 2, pp. 425–443, Dec. 2022, doi: 10.25229/beta.1206552.

ISNAD

Şanlı, Devran. “Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data”. Bulletin of Economic Theory and Analysis 7/2 (December 1, 2022): 425-443. https://doi.org/10.25229/beta.1206552.

JAMA

1.Şanlı D. Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data. Beta. 2022;7:425–443.

MLA

Şanlı, Devran. “Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data”. Bulletin of Economic Theory and Analysis, vol. 7, no. 2, Dec. 2022, pp. 425-43, doi:10.25229/beta.1206552.

Vancouver

1.Devran Şanlı. Testing the Armey Curve Hypothesis in Turkey: Evidence from the Provincial Data. Beta. 2022 Dec. 1;7(2):425-43. doi:10.25229/beta.1206552

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