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Myeong Hwan Kim, Yongseung Han, Heather L.R. Tierney and Eréndira Yareth Vargas López
''The Economic Consequences of Government Spending in South Korea''
( 2020, Vol. 40 No.1 )
This paper sheds light on the relationship between government expenditures and economic growth for South Korea. Using annual data from 1953 to 2016, this paper does find there to be an inverted U-shaped relationship between government expenditures and the growth rate of real GDP and between private expenditures and the growth rate of real GDP for South Korea. This study shows that there is an optimal level of government expenditure ratio, private expenditure ratio, and total expenditure ratio, which promotes economic growth for South Korea, but there is a decline in economic growth once this optimal level is reached.
Keywords: Rahn Curve; Wagner's Law; Public Spending; Public Expenditure; Economic Growth
JEL: O4 - Economic Growth and Aggregate Productivity: General
H1 - Structure and Scope of Government: General
Manuscript Received : Jun 14 2019 Manuscript Accepted : Feb 05 2020

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