摘要：The Armey curve suggests that there is an inverted U relationship between government size and economic growth. In order to investigate this relationship for 12 developing countries from 1990 to 2012, this study uses panel data methodology including panel unit root, cointegration and causality tests. The results show that i) the series are integrated at order of I(1), ii) there exists a long run equilibrium relationship between the variables, iii) economic growth is positively correlated with the government consumption expenditure, iv) economic growth is negatively correlated with the squares of government consumption expenditure, v) there exists a causality running from the explanotary variables to economic growth in the long run and short run. The study provides an evidence that there exists an inverted U relationship between government consumption expenditure and economic growth implying the validity of Armey curve in these countries. The study may also provide some policy implications.
