Asymmetric Growth Impact of Fiscal Policy: Evidence from Egypt

15 Pages Posted: 3 Jan 2018

See all articles by Hany Abdel-Latif

Hany Abdel-Latif

Swansea University; Economic Research Forum; The Economic Society

Tapas Mishra

Southampton Business School, University of Southampton

Date Written: August 15, 2016

Abstract

This paper empirically explores how fiscal policy - represented by changes in government spending- exerts asymmetric effects on economic growth in the context of a developing country, Egypt in particular. By allowing for the theoretical plausibility of asymmetric effects of fiscal policy on economic activity, our research suggests that nothing can guarantee linearity between the growth impact of increasing and decreasing government expenditures. Using a non-linear ARDL model on Egypt data - at both aggregated and disaggregated levels- for the period 1980-2013, this paper provides new evidence of a non-linear relationship between government spending and economic growth.

Keywords: fiscal policy, economic development, non-linear ARDL, Egypt

JEL Classification: E6, O1

Suggested Citation

Abdel-Latif, Hany and Mishra, Tapas, Asymmetric Growth Impact of Fiscal Policy: Evidence from Egypt (August 15, 2016). Available at SSRN: https://ssrn.com/abstract=3091610 or http://dx.doi.org/10.2139/ssrn.3091610

Hany Abdel-Latif (Contact Author)

Swansea University ( email )

School of Management
Bay Campus
Swansea, SA1 8EN
United Kingdom

HOME PAGE: http://www.swansea.ac.uk/

Economic Research Forum ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

HOME PAGE: http://erf.org.eg

The Economic Society ( email )

School of Management
Swansea University
Swansea, Swansea SA1 8EN
United Kingdom

HOME PAGE: http://theeconomicsociety.org

Tapas Mishra

Southampton Business School, University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

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