Abstract

JEYHOON TABAR, FOZIEH; NAJAFI, ZAHRA  and  SISTANI BADOOEI, YASER. THE IMPACT OF EDUCATIONAL EXPENDITURES OF GOVERNMENT ON ECONOMIC GROWTH OF IRAN. AD-minister [online]. 2017, n.30, pp.217-235. ISSN 1692-0279.  https://doi.org/10.17230/ad-minister.30.11.

Using the annual data of Iran’s economy from 1981-2012, this study examines Wagner’s law and the Keynesian hypothesis about the relationship between the real government expenditure and the real GDP. In this regard, this paper investigated the relationship between the total government expenditure, the GDP and the relationship between government educational expenditure and GDP using bivariate and multivariate models. The multivariate model is used to reduce the specified error issues that has not been considered in many studies. The co-integration was examined using the auto regressive distributive lag method (ARDL) of both long-term and short-term relationships. In making the estimations of the Wagner’s view, the variables: real GDP, capital stock and labor force stock respectively, had a positive, a negative, and a positive impact on total government expenditure and the long-term relationship is true in this regard. Additionally, in the estimation of Keynesian model, the educational expenditures, unlike real expenditures of government, had a long-term relationship. In addition, the variable, capital, in both models had a similar effect on the real GDP, and the labor force coefficient in the presence of the total expenditures and educational expenditures were negative and positive respectively.

Keywords : Wagner; Keynes; total expenditures; educational expenditures; government expenditure; ARDL; ECM..

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