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dc.contributor.authorFic, Tatianaen_US
dc.contributor.authorGhate, Chetanen_US
dc.date.accessioned2009-01-28T15:39:46Z-
dc.date.available2009-01-28T15:39:46Z-
dc.date.issued2004en_US
dc.identifier.urihttp://hdl.handle.net/10419/18161-
dc.description.abstractCan a growing welfare state induce a regime switch in the growth rate of an economy? This paper constructs a dynamic political economy model of economic growth and the welfare state in which both variables are non-linearly related and jointly endogenous. Using a Markov switching framework over the period 1950-2001, we find that the structural decline in growth rates that several welfare state economies experienced during 1970-1975 are preceded by movements to a high welfare state regime. This suggests that expanding welfare state regimes are associated with low economic growth regimes, while contracting welfare state regimes are associated with high growth regimes. However, we also find that the structural decline in growth rates leads to a downward structural break in the welfare state for many welfare state economies. This suggests that declining growth regimes are associated with contracting welfare state regimes, as lower growth forces politicians to cut the size of the welfare state. We also report strong evidence that both expansion and contractions in the welfare state affects growth non-linearly. These results are able to characterize a predictable and general pattern of welfare state?growth evolution.en_US
dc.language.isoengen_US
dc.publisherDeutsches Institut für Wirtschaftsforschung (DIW) Berlinen_US
dc.relation.ispartofseriesDIW-Diskussionspapiere 424en_US
dc.subject.jelC22en_US
dc.subject.jelE62en_US
dc.subject.jelO40en_US
dc.subject.jelP16en_US
dc.subject.ddc330en_US
dc.subject.keywordWelfare Stateen_US
dc.subject.keywordStructural Changeen_US
dc.subject.keywordRegime Switching Modelsen_US
dc.subject.keywordPositive Political Economyen_US
dc.subject.keywordEndogenous Growthen_US
dc.subject.stwSozialstaaten_US
dc.subject.stwWirtschaftswachstumen_US
dc.subject.stwStaatsquoteen_US
dc.subject.stwNeue Wachstumstheorieen_US
dc.subject.stwPublic Choiceen_US
dc.subject.stwSchätzungen_US
dc.subject.stwTheorieen_US
dc.subject.stwOECD-Staatenen_US
dc.subject.stwregime switching modelen_US
dc.titleThe Welfare State, Thresholds, and Economic Growthen_US
dc.typeWorking Paperen_US
dc.identifier.ppn389379859en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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