Article citationsMore>>

J. J. M. Kremers, “U.S. Federal Indebtedness and the Conduct of Fiscal Policy,” Journal of Monetary Economics, Vol. 23, No. 2, 1989, pp. 219-238. doi:10.1016/0304-3932(89)90049-4

has been cited by the following article:

• TITLE: The Effect of Federal Government Size on Long-Term Economic Growth in the United States, 1791-2009

  AUTHORS: Federico Guerrero, Elliott Parker

  KEYWORDS: Long-Term Economic Growth; Federal Government Size; Wagner’s Law; United States; Cointegration; Granger Causality; Vector Autoregression; Vector Error Correction Model

  JOURNAL NAME: Modern Economy, Vol.3 No.8, December 31, 2012

  ABSTRACT: We consider whether there is statistical evidence for a causal relationship between federal government expenditures and growth in real GDP in the United States, using available data going back to 1791. After studying the time-series properties of these variables for stationarity and cointegration, we investigate Granger causality in detail in the context of a Vector Error Correction Model. While we find causal evidence that faster GDP growth leads to faster growth in government spending, we find no evidence supporting the common assertion that a larger government sector leads to slower economic growth.