SELECTION OF RELEVANT VARIABLES IDENTIFY-ING THE RELATIONSHIP BETWEEN THE GENERAL GOVERNMENT SECTOR SIZE AND THE ECONOMY

Abstract

The article is dedicated to research on relations between size of general government sector and the economy. The aim of this article is determination of the most important values that are used to identify relations between size of the sector and the economy, as well as determination of how frequently they appear in relation to pair of the variables that are being researched. In exploration of relations between the variables that describe size of general government sector and the economy, the authors used methodology that bases on Bayes networks. The object of the analyses was the economies of EU member states and their public finances systems. The period that was selected for the research has covered the years 2000–2013 (inclusive). In order to describe economies, the authors selected 18 variables, whereas to describe general government sector 15 variables. All variables were sourced from databases of Eurostat, OECD and World Bank. Among economy’s measures and general government sector’s measures, there were also some benchmarks found as standard ones (classical ones) as well as measures proposed by the authors, which were not used in the scientific descriptions that were dedicated to researches on sizes of general government sector. Ipso facto, this article fits in the discussion on, general government sector and optimization of its size, and at the same time it provides starting point for further research on sector’s size and its influence on economy.

Keywords

• general government sector, general government sector size, economy, economic policy, public finance, relationship between the general government sector size and the economy