A Study on the Relationship between the Composition of Government Expenditure and Economic Growth in Taiwan
Date Issued
2016
Date
2016
Author(s)
Yang, Yuan-Ting
Abstract
This study analyzes the relationship between the structure of government expenditure and economic growth rate in Taiwan with the sample period from 1962 to 2014. Specifically, the structure of government expenditure could be divided into three categories: the expenditure on general government, the expenditure on national defense and the expenditure on economic development. The empirical results indicate that the economic growth rate is positively related to the expenditure on education, science and culture; on the other hand, the economic growth rate is negatively related to expenditure on the expenditure on general government, national defense and economic development. In the short term, the correlation between the economic growth rate and expenditure on national defense is positive because of the expenditure includes the spending on the purchase of instant commodities leading to the temporary economic growth. In addition to that, the expenditure on economic development also positively correlates with the economic growth in the short term. Possible explanation might be that a large number of infrastructure was constructed in the past and it consequently induced the fast-pace economic growth; however, most infrastructure had been completely established so that the situation provoked a negative correlation between the expenditure on economic development and the economic growth rate in the long term. Besides, the expenditure on education negatively correlates with the economic growth rate due to the slow accumulation of human capital having no instant effect on economic growth. Furthermore, expenditure on social security, retirement and relief have no significant effect on the economic growth rate.
Subjects
Economic Growth
Structure of Government Expenditure
VAR
VECM
SDGs
Type
thesis
File(s)![Thumbnail Image]()
Loading...
Name
ntu-105-R03323025-1.pdf
Size
23.54 KB
Format
Adobe PDF
Checksum
(MD5):4f7813f8d12e350169b6c5bab0a83ac3