Mastrakov, A. V. Double-Stage Approach to Defining the Relation between the Optimum Size of a State and Economic Growth

Abstract: The author of the present article describes disadvantages of the existing models that reflect the relation between the size of a state and economic growth. Taking into account the primary importance of this topic, the author offers an alternative approach consisting of the first stage, modeling of the relation between a size of state expenditures and human capital, and the second stage, analysis of the influence of human capital on the rate of economic growth. This approach allows to describe a logically relevant relation between all economic categories included in the model. In his research the author has used the general research methods such as analysis, generalization and modeling and particular research methods such as economic mathematical modeling, margin (limit) analysis and functional analysis. The author offers and proves the efficiency of a model for defining the relation between state expenses on social services and economic growth. For the first time in academic literature the author offers a method of calculating the time period between execution of state expenses and changes in the rate of economic growth. The author also evaluates the degree of influence of different macroeconomic shifts on changing the size of a state.

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