Evaluation the effects of inflation and government spending on economic growth (with an emphasis on GMM technique)

This paper examines the effects of inflation and government spending on economic growth. To achieve this purpose, the panel data method to the approachof Generalize Method of Moments (GMM) was used to analyze 54 selected developing countries, regarding Iran, during 2001-2013. The indices for thevariables of trade liberalization, physical capital and human development as well, has entered the model, as control variables. The results of the GMM estimatessuggest that government spending, human development index and physical capital have positive impact on economic growth, but inflation appear to have negative effects in the form is.

Keywords:

inflation , government spending , economic growth , GMM technique