Optimal size of government and economic growth in EU-27

Using time-series techniques and panels data, the paper analyses for the EU countries in the period 1970-2009 the existence and shape of the “BARS curve” (Barro, Armey, Rahn, and Scully), connecting the size of Government (measured by the share of public expenditure on GDP) to the rate of economic growth. Individual countries research has been conducted for 12 countries for whom enough time series were available, while panel analysis has been performed both for EU-27 and for subgroups, distinguished by their different socio-economic and monetary structures, and per capita GDP. BARS curves were generally found, and the shares of actual public expenditures generally exceed substantially those related to the maximization of GDP growth. However, great differences do emerge. For the 12 countries examined by time-series techniques, the difference between the actual level and the peak of the BARS curve ranges from 5.7 points for Germany and 18.1 points for Belgium. Panel data analysis for EU-27 shows a peak of the BARS curve at 37%, while the actual level is about 47%. While, panel data disaggregation shows a similar situation for the Western Continental Countries, with a smaller gap for Anglo-Saxon countries. For low per capita GDP countries the peak is higher than for the mature economies. So, further research may prove useful to show light on the disparities emerging in the empirical analysis of individual countries and of the panel sub-groups. However, the present research provides enough evidence that high GDP countries of EU have overcome the level of government size compatible with GDP growth rate maximization.Government size; economic growth; BARS curve; public expenditure; EU-27.

OPTIMAL SIZE OF GOVERNMENT AND ECONOMIC GROWTH IN EU-27

Using time-series techniques and panels data, the paper analyses for the EU countries in the period 1970-2009 the existence and shape of the "BARS curve" (Barro, Armey, Rahn, and Scully), connecting the size of Government (measured by the share of public expenditure on GDP) to the rate of economic growth. Individual countries research has been conducted for 12 countries for whom enough time series were available, while panel analysis has been performed both for EU-27 and for subgroups, distinguished by their different socio-economic and monetary structures, and per capita GDP. BARS curves were generally found, and the shares of actual public expenditures generally exceed substantially those related to the maximization of GDP growth. However, great differences do emerge. For the 12 countries examined by timeseries techniques, the difference between the actual level and the peak of the BARS curve ranges from 5.7 points for Germany and 18.1 points for Belgium. Panel data analysis for EU-27 shows a peak of the BARS curve at 37%, while the actual level is about 47%. While, panel data disaggregation shows a similar situation for the Western Continental Countries, with a smaller gap for Anglo-Saxon countries. For low per capita GDP countries the peak is higher than for the mature economies. So, further research may prove useful to show light on the disparities emerging in the empirical analysis of individual countries and of the panel sub-groups. However, the present research provides enough evidence that high GDP countries of EU have overcome the level of government size compatible with GDP growth rate maximization.Government size; economic growth; BARS curve; public expenditure; EU-27

Public debt sustainability. An empirical study on OECD countries

For a panel of 21 OECD heterogeneous countries from 1991 to 2015, we study governments’ reactions to the accumulation of debt and look at whether governments voluntary take corrective measures when the debt-GDP ratio starts rising or they rather let the debt grow. We distinguish between discretionary and automatic response of primary balance of government actions, as captured by the structural component of public primary balance and by cyclical component of public primary balance. We show the existence of a systematic long-term relationship between debt and structural primary balance supporting the view that the long-term governments’ discretionary response to increases in the debt-GDP ratio is negative, that is, governments are not currently taking long-term actions that counteract the increases in debts and do not satisfy the intertemporal budget constraint. In the short term, an asymmetric fiscal policy response exploiting the output gap, by part of the political class of the countries considered, seems to emerge: it intervenes with a new deficit and debt when the output gap is positive, but it does not adopt a symmetrical correction when the situation is reversed

Geometry optimization of a magnetorheological clutch operated by coils

Magnetorheological fluids are smart materials responsive to magnetic field, widely applied in dampers and shock absorbers but also in clutches and brakes. The magnetorheological fluid gap shape is a very important topic in the design of clutches, since it directly influences the transmissible torque and the power loss. In this paper, an approach to magnetorheological fluid clutch design based on optimization is proposed and tested on four different layouts. Starting from a given available volume, two magnetorheological fluid gap shapes, namely single cylinder and multi-disc, and two coils positions, i.e. internal or external, were considered. A lumped parameter model was developed to analytically compute the magnetic flux along the clutch magnetic circuit and to calculate the transmissible torque of the clutch. The optimal geometry of the clutch for maximum transmissible torque, in terms of number and dimensions of the coil sectors, was determined for each shape and coil configuration and the results were validated by finite element models

Government Size and Economic Growth in Italy: A Time-series Analysis

The aim of this paper is to empirically assess the relationship between government size and economic growth. Using time series methodologies applied to annual data for Italy, the effect of public expenditure, unemployment, and fiscal reforms on economic activity have been analysed. The data used in these analyses have been collected and shown in Forte (2011). The analysis covered a very long period, 1861-2008. Our results show the presence of a non-linear relationship between the size of the public sector (measured by the share of government expenditure over GDP) and the economic growth rate for Italy. In general, the presence of an inverted “U-shape” curve, which emerges for the last two decades, suggests that expenditure cuts might be faster than GDP dynamic. This result is in line with recent empirical literature on this issue. Interestingly, for the monarchic years, it has been found that the zero budget constraint provoked a slower aggregate income variation

A Probabilistic Approach to the Drag-Based Model

The forecast of the time of arrival of a coronal mass ejection (CME) to Earth is of critical importance for our high-technology society and for any future manned exploration of the Solar System. As critical as the forecast accuracy is the knowledge of its precision, i.e. the error associated to the estimate. We propose a statistical approach for the computation of the time of arrival using the drag-based model by introducing the probability distributions, rather than exact values, as input parameters, thus allowing the evaluation of the uncertainty on the forecast. We test this approach using a set of CMEs whose transit times are known, and obtain extremely promising results: the average value of the absolute differences between measure and forecast is 9.1h, and half of these residuals are within the estimated errors. These results suggest that this approach deserves further investigation. We are working to realize a real-time implementation which ingests the outputs of automated CME tracking algorithms as inputs to create a database of events useful for a further validation of the approach.Comment: 18 pages, 4 figure