Arbeitspapier
The impact of financial openness on the size of utility-enhancing government
This paper studies the impact of financial openness on the size of government, and other key economic variables, such as the consumption-wealth ratio, the growth rate of wealth, and welfare, in a two-country world, based on a portfolio approach, assuming that public spending is utility-enhancing. The model suggests that the size of government, the consumption-wealth ratio, and welfare should be higher in an open economy due to a higher productivity and/or less volatility through risk sharing. The theoretical results for the growth rate depend on differences on productivities and consumption-wealth ratios. The empirical evidence based on a sample of 50 countries for the period 1970-2009 broadly supports the main theoretical results of the model, even though the inclusion of Singapore distorts sometimes the broad picture.
- Sprache
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Englisch
- Erschienen in
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Series: Economics Discussion Papers ; No. 2013-7
- Klassifikation
-
Wirtschaft
Open Economy Macroeconomics
Economic Growth of Open Economies
- Thema
-
Financial openness
productivity
volatility
consumption-wealth ratio
growth
welfare
size of government
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Erauskin, Iñaki
- Ereignis
-
Veröffentlichung
- (wer)
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Kiel Institute for the World Economy (IfW)
- (wo)
-
Kiel
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Erauskin, Iñaki
- Kiel Institute for the World Economy (IfW)
Entstanden
- 2013
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