The Validity Of Compensation And Efficiency Hypothesis In Brics-T Countries

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Year-Number: 2018-14
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Number of pages: 1059-1064
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Nowadays it is a big dilemma if international trade carries external risks or not. Many domestic economies had risks against the USA tariff decisions. That shocks affect the real economy in a speculative way. In this study, the effect of globalization on public expenditures is investigated. Efficiency hypothesis advocates that globalization decreases government expenditures while compensation hypothesis advocates that relationship between globalization and government expenditures is positive with a different argument. In this study, The Validity of Efficiency and Compensation Hypothesis will be analyzed in order for BRICS-T for the period 1989-2016. According to test results, for Russia and India, the government expenditures seems to depend on trade openness.


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