| Summary: | 碩士 === 國立高雄應用科技大學 === 企業管理系 === 106 === Nowadays, the relationship between government expenditure and economic growth is an essential topic of concern for many scholars. This article takes the eight countries of OECD as the object of study: Canada, Switzerland, the United Kingdom, Japan, New Zealand, Australia, Denmark, and South Korea. Using the boundary cointegration test of Pesaran et al. (2001) and applying the error correction model to analyze the long-term relationship between government expenditure and economic growth and to identify long-term relationships between nonlinear ARDL test variables.
The empirical results show that the government expenditures of these eight countries have a co-integration relationship with economic growth. However, linear and nonlinear results have different results for different countries. In conclusion, the results of the linear verification: if GDP increases, government spending will also increase, indicating a positive relationship between GDP and government spending. According to the results of the non-linear test, when the economy is in recession, the increase of 1% in GDP will have three different results when compared with the booming economy: 1. A low rate of decrease 2. A large decrease 3. It will increase. The results of the linear and nonlinear tests show that in the downturn of the economy, there will be two different results for government expenditures: 1. Low reduction 2. Large reduction. The study tested the effects of asymmetry at the end, with asymmetric effects in Canada, Japan, Australia, Denmark, and South Korea, indicating that the economy will affect government spending.
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