MA student of economics, Department of Economics, Azad Islamic University, khorasgan Branch
Department of Economics, Islamic Azad University, khorasgan Branch, Isfahan, Iran
Associated professor of economics, Department of Economics, University of Isfahan
Department of Economics, University of Isfahan, Isfahan, Iran
Among many factors which affect the economic growth of a country, governments are considered to be the most influential stimulants. Because of the importance of studying the government expenditures on economic growth, many techniques have been suggested so far.
In this article we have applied a new technique, namely Spatial Econometrics Method. This method examines “neighborhood” and “location” factors, which are influential in weakening or reinforcing the effects. In this article, by using Ram’s growth model (1986) and applying geographic aspect to global regression models, attempts are made to discover the effect of U.S states government expenditures on economic growth of states. Finally, it became clear that the growth of each state is influenced by the growth of neighbor states. Also state government expenditures have no effect on economic growth. In addition, the growth of labor force is introduced as one of the influential elements on the states’ economic growth.