The Effectiveness of Government Size on Economic Growth in Iran (by Boundaries Testing Approach)

Abstract

We analyse short-run and long-run effects of government size on the economic growth of Iran ,using 1353-90 time series .the results of estimation , by using of ARDL and boundaries testing approach, indicate convergence of the dynamic model to the long-run trend. The error correction model also show that 59 present of departure from the long-run trend will be corrected in every period. The long-run estimation shows a positive relation between oil price, oil revenues and ratio of investment to the real GDP as independent variables and economic growth as dependent variable, and a negative relation between government size and a dummy variable for war and revolution as independent variables and economic growth.

Keywords

• government size
• economic growth
• oil price
• investment
• ardl