Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81432
Authors: 
Bergh, Andreas
Öhrn, Nina
Year of Publication: 
2011
Series/Report no.: 
IFN Working Paper [864]
Abstract: 
In a recent paper, Colombier (2009) uses a robust estimation technique and claims to find empirical evidence that government size has not been detrimental to growth for OECD countries during the 1970 to 2001 period, and that endogenous growth theory is not corroborated. We examine the robustness of these findings, and show that Colombier’s results differ from those in other recent papers not because of the estimator used, but because of the exclusion of other control variables. Adding time fixed effects to Colombier’s data set, and using the same econometric method, we obtain results in line with other findings, corroborating endogenous growth theory. Adding further control variables illustrates the robustness of the negative correlation between total tax revenue and economic growth for both instrumented and non-instrumented regressions.
Subjects: 
Economic growth
Government size
Taxation
Robust estimators
Panel data
JEL: 
E62
H11
H20
O43
Document Type: 
Working Paper

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