Investigating Correlation between State Expenditure & Economic Growth in Iran
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The impact that government's expenditures have on economic growth has attracted huge amount of attention among economic experts. Theoretically, if state sector is less efficient than private sector, due to bulkier size of the government will lead to slower economic growth. However, if government would be capable of providing public rudimentary goods as private sector would not be able to do that, will aid rapid growth of economy. Economic experts define government's main duties as providing safe and secure society, health, and education. For some its responsibilities goes further and necessitates state interference in economy for the sake of keeping it balanced. Nevertheless, for some others, state interference is considered to be restricting and meddlesome in terms of being free to choose and call it the state's inefficiency. According to these experts, government will lose in this case. In Iran economy, government has the major portion and proportionally it has witnessed a gradual increase in its expenditure. Additionally, a necessary growth in public services has forced government to become an economical parameter and in some cases embark on to be productive. Nowadays, states have tried to manipulate different countries' economy due to the volume of national product which is accomplished in private sector and giving direction in a varied method in this regard. Furthermore, accomplishing this process is an inevitable condition for developing countries' economy in an organized way with an efficient planning. In parallel with huge economical efforts that are made countrywide, government's role is progressing too and one can see the trace of government over market and economy procedure. You cannot find government and private as separate entities in economy but, in most of the societies there is a mixed economic trend. The outstanding feature of this study is to estimate active long and short term relationship between different government expenditure elements and economy growth. This will remarkably assist short and long term planning of government expenditure for obtaining more optimal economy growth.
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