Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18161
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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 growthand 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 findthat the structural decline in growth rates that several welfare state economies experiencedduring 1970-1975 are preceded by movements to a high welfare state regime.This suggests that expanding welfare state regimes are associated with low economicgrowth regimes, while contracting welfare state regimes are associated with high growthregimes. However, we also find that the structural decline in growth rates leads to adownward structural break in the welfare state for many welfare state economies. Thissuggests that declining growth regimes are associated with contracting welfare stateregimes, as lower growth forces politicians to cut the size of the welfare state. We alsoreport strong evidence that both expansion and contractions in the welfare state affectsgrowth non-linearly. These results are able to characterize a predictable and generalpattern of welfare state?growth evolution.en_US
dc.language.isoengen_US
dc.publisher|aDeutsches Institut für Wirtschaftsforschung (DIW) |cBerlinen_US
dc.relation.ispartofseries|aDIW Discussion Papers |x424en_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-
dc.identifier.repecRePEc:diw:diwwpp:dp424en_US

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