Estimating Army Curve in Two Oil Exporter and Importer Countries: Iran and South Korea 1990 – 2015

Subject Areas : Bi-quarterly Journal of development economics and planning

Bahar Hafezi ¹ (Assistant professor, Department of Economics, khomeinishahr Branch, Islamic Azad University, Khomeinishahr, Isfahan, Iran)

Received: 2022-06-26 Accepted : 2022-07-20 Published : 2022-08-23

Keywords: Economic Growth, Public Expenditure, Armey Curve,

Abstract :

Government activities in an economic system play an important role in the country's economic growth and development, but increasing the volume of these activities to certain thresholds has a positive effect on economic growth, and from that threshold, increasing in the volume of government activities not only has no positive effect on economic growth, But these activities are the main obstacles to growth. The explanation for the non-linear effects of government expenditures on economic growth is known as the Army Curve. In this study, the relationship between government expenditures and economic growth has been investigated by using Army curve in Iran and South Korea (1990-2015) and with using autoregressive distributed lag model. The results show a positive nonlinear relationship between government expenditures and economic growth in both Iran and South Korea. With the negative sign of the power factor of the second government expenditure, the existence of a logistic curve in the long run is evident for both oil exporter and importer country: Iran and South Korean

References:

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