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IS ARMEY CURVE VALID IN TURKISH ECONOMY?

Year 2018, Prof. Dr. Harun TERZI Special Issue, 335 - 346, 19.09.2018
https://doi.org/10.18092/ulikidince.442807

Abstract

According to Armey (1995), there is quadratic
relationship between economic growth and government size. In the literature,
this functional relationship is known as Armey curve. Armey curve assumes that
the relationship between two variables is an inverted U shaped and attends to
optimal government size. According to Armey curve, in an economy, the
maximum value
of economic growth is obtained when government size is optimal.
In this study, for the Turkish economy, the validity of Armey curve
was tested for the period of 1998-2016. In the study, ARDL bound test was
applied and the validity of Armey curve was examined by using long-term series.
The long-term series were obtained by using Hodrick-Prescott method. The results of this paper indicate that the
Armey curve is valid for Turkey. It can be said that the relationship between
long-term economic growth and long-term government size is nonlinear and quadratic.

References

  • Altunç, Ö. F. ve Aydın, C. (2012). Türkiye'de Kamu Sektörü Büyüklüğü ve Ekonomik Büyüme İlişki-sinin Ampirik Analizi, Ekonomik Yaklasim, 23, 79-98.
  • Altunç, Ö. F. ve Aydın, C. (2013). The Relationship between Optimal Size of Government and Economic Growth: Empirical Evidence from Turkey, Romania and Bulgaria, Procedia-Social and Behavioral Sciences, 92, 66-75.
  • Armey, D. (1995). The Freedom Revolution: Why Big Government Failed, Why Freedom Works, and How We Will Rebuild America, Regnery Publishing, Washington.
  • Dar, A. A. ve Amirkhalkhali, S. (2002), Government Size, Factor Accumulation, and Economic Growth: Evidence from OECD Countries, Journal of Policy Modeling, 24, 679-692.
  • Facchini, F. ve Melki, M. (2011). Optimal Government Size and Economic Growth in France (1871-2008): An Explanation by the State and Market Failures, Working Papers, 77.
  • Herath, S. (2010). The Size of the Government and Economic Growth: An Empirical Study of Sri Lanka, SRE-Discussion, 05.
  • Herath, S. (2012). Size of Government and Economic Growth: A Nonlinear Analysis, Economic An-nals, 57; 7-30.
  • Gwartney, J., Lawson, R. ve Holcombe, R. (1998). The Size and Functions of Government and Eco-nomic Growth, Joint Economic Committee.
  • Hodrick, J. R. ve Prescott, E.C. (1981). Postwar Business Cycles: An Empirical Investigation, Northwestern University Discussion Paper, 451.
  • Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. ve Shin, Y. (1992). Testing the Null Hypothesis of Sta-tionarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?, Journal of Econometrics, 54(1-3), 159-178.
  • Kormendi, R. C. ve Meguire, P. (1986). Government Debt, Government Spending, and Private Sec-tor Behavior: Reply, The American Economic Review, 76, 1180-1187.
  • Mavrov, H. (2007). The Size of Government Expenditure and the Rate of Economic Growth in Bul-garia, Economic Alternatives, 1, 52-63.
  • Nuta, A. C. ve Nuta, F. (2014). A Discussion Regarding the Armey Model Validity for Romania, EIRP Proceedings, 9, 173-180.
  • Pesaran, M. H., Yongcheol S. ve Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships, Journal of Applied Econometrics, 16, 289-326.
  • Pevcin, P. (2004). Does Optimal Size of Government Spending Exist?, University of Ljubljana, 10, 101-135.
  • Olaleye, S. O., Edun, F., Bello, H. T. ve Taiwo, S. B. (2014). Government Expenditure and Economic Growth: An Empirical Analysis of the Armey Curve in Nigeria, Romanian Economic Journal, 17, 47-66.
  • Turan, T. (2014). Optimal Size of Government in Turkey. International Journal of Economics and Financial Issues, 4, 286.
  • Vedder, R.K. ve Gallaway, L.E. (1998). Government Size and Economic Growth, Washington: Joint Economic Committee.
  • Yamak, N. ve Küçükkale, Y. (1997). Türkiye’ de Kamu Harcamaları Ekonomik Büyüme İlişkisi, İktisat, İşletme ve Finans, 131, 5-14
  • Yamak, R. ve Erdem, H. F. (2016). Armey Eğrisi: Türkiye Örneği, EYİ2016 Tam Metin Kitabı, Sivas.
  • Yamak, R. ve Erdem, H. F. (2017). Uygulamalı Zaman Serisi Analizleri, Celepler Matbaa Yayın ve Dağıtım, Trabzon.

TÜRKİYE EKONOMİSİNDE ARMEY EĞRİSİ GEÇERLİ MİDİR?

Year 2018, Prof. Dr. Harun TERZI Special Issue, 335 - 346, 19.09.2018
https://doi.org/10.18092/ulikidince.442807

Abstract

Armey
(1995)’ e göre ekonomik büyüme ile kamu kesimi büyüklüğü arasında ikinci
dereden fonksiyonel bir ilişki söz konusudur. Literatürde bu ilişki Armey
eğrisi olarak isimlendirilir. Armey eğrisi iki değişken arasındaki ilişkinin
ters U şeklinde olduğunu varsayar ve
optimal kamu kesimi büyüklüğü ne olmalıdır sorusuyla
ilgilenir. Armey eğrisine göre, bir ekonomide kamu kesiminin büyüklüğü optimal
olduğunda ekonomik büyüme maksimum değerini alır.
Bu çalışmada 1998-2016 dönemi
için Türkiye ekonomisinde Armey eğrisinin geçerli olup olmadığı incelenmiştir. Çalışmada
ARDL sınır testi yaklaşımı uygulanmış ve Armey eğrisinin geçerliliği uzun dönem
serileri kullanılarak test edilmiştir.
Uzun dönem seriler
Hodrick-Prescott yöntemi ile elde edilmiştir. Çalışmada sonuç olarak, Türkiye
ekonomisinde Armey eğrisinin geçerli olduğu belirlenmiştir. Böylece uzun dönem
ekonomik büyüme ve uzun dönem kamu kesimi büyüklüğü arasındaki ilişkinin doğrusal
olmayan, ikinci dereceden fonksiyonel bir ilişki olduğu söylenebilir. 

References

  • Altunç, Ö. F. ve Aydın, C. (2012). Türkiye'de Kamu Sektörü Büyüklüğü ve Ekonomik Büyüme İlişki-sinin Ampirik Analizi, Ekonomik Yaklasim, 23, 79-98.
  • Altunç, Ö. F. ve Aydın, C. (2013). The Relationship between Optimal Size of Government and Economic Growth: Empirical Evidence from Turkey, Romania and Bulgaria, Procedia-Social and Behavioral Sciences, 92, 66-75.
  • Armey, D. (1995). The Freedom Revolution: Why Big Government Failed, Why Freedom Works, and How We Will Rebuild America, Regnery Publishing, Washington.
  • Dar, A. A. ve Amirkhalkhali, S. (2002), Government Size, Factor Accumulation, and Economic Growth: Evidence from OECD Countries, Journal of Policy Modeling, 24, 679-692.
  • Facchini, F. ve Melki, M. (2011). Optimal Government Size and Economic Growth in France (1871-2008): An Explanation by the State and Market Failures, Working Papers, 77.
  • Herath, S. (2010). The Size of the Government and Economic Growth: An Empirical Study of Sri Lanka, SRE-Discussion, 05.
  • Herath, S. (2012). Size of Government and Economic Growth: A Nonlinear Analysis, Economic An-nals, 57; 7-30.
  • Gwartney, J., Lawson, R. ve Holcombe, R. (1998). The Size and Functions of Government and Eco-nomic Growth, Joint Economic Committee.
  • Hodrick, J. R. ve Prescott, E.C. (1981). Postwar Business Cycles: An Empirical Investigation, Northwestern University Discussion Paper, 451.
  • Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. ve Shin, Y. (1992). Testing the Null Hypothesis of Sta-tionarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?, Journal of Econometrics, 54(1-3), 159-178.
  • Kormendi, R. C. ve Meguire, P. (1986). Government Debt, Government Spending, and Private Sec-tor Behavior: Reply, The American Economic Review, 76, 1180-1187.
  • Mavrov, H. (2007). The Size of Government Expenditure and the Rate of Economic Growth in Bul-garia, Economic Alternatives, 1, 52-63.
  • Nuta, A. C. ve Nuta, F. (2014). A Discussion Regarding the Armey Model Validity for Romania, EIRP Proceedings, 9, 173-180.
  • Pesaran, M. H., Yongcheol S. ve Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships, Journal of Applied Econometrics, 16, 289-326.
  • Pevcin, P. (2004). Does Optimal Size of Government Spending Exist?, University of Ljubljana, 10, 101-135.
  • Olaleye, S. O., Edun, F., Bello, H. T. ve Taiwo, S. B. (2014). Government Expenditure and Economic Growth: An Empirical Analysis of the Armey Curve in Nigeria, Romanian Economic Journal, 17, 47-66.
  • Turan, T. (2014). Optimal Size of Government in Turkey. International Journal of Economics and Financial Issues, 4, 286.
  • Vedder, R.K. ve Gallaway, L.E. (1998). Government Size and Economic Growth, Washington: Joint Economic Committee.
  • Yamak, N. ve Küçükkale, Y. (1997). Türkiye’ de Kamu Harcamaları Ekonomik Büyüme İlişkisi, İktisat, İşletme ve Finans, 131, 5-14
  • Yamak, R. ve Erdem, H. F. (2016). Armey Eğrisi: Türkiye Örneği, EYİ2016 Tam Metin Kitabı, Sivas.
  • Yamak, R. ve Erdem, H. F. (2017). Uygulamalı Zaman Serisi Analizleri, Celepler Matbaa Yayın ve Dağıtım, Trabzon.
There are 21 citations in total.

Details

Primary Language Turkish
Journal Section Articles
Authors

Rahmi Yamak 0000-0002-2604-1797

Havvanur Feyza Erdem 0000-0002-3730-1793

Publication Date September 19, 2018
Published in Issue Year 2018 Prof. Dr. Harun TERZI Special Issue

Cite

APA Yamak, R., & Erdem, H. F. (2018). TÜRKİYE EKONOMİSİNDE ARMEY EĞRİSİ GEÇERLİ MİDİR?. Uluslararası İktisadi Ve İdari İncelemeler Dergisi335-346. https://doi.org/10.18092/ulikidince.442807

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