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The objective of this study is to examine the long run as well as short run relationship between government expenditure at aggregate as well as disaggregate level and economic growth in Pakistan. The study uses six functional forms of Wagner’s law and further classify these forms to incorporate disaggregate expenditure. Study uses annual time serie...
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... next step after establishing the cointegration relationship between variables in model 1b, 3b, 4b, 5b, and 6b is to develop error correction model (ECM), which captures the speed of short run adjustments towards the long run equilibrium. Results of ECM of model 1b, 3b, 4b, 5b, and 6b are presented in Table 3. The estimated coefficient of ECT is negative and significant in all the models. ...Similar publications
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... When per capita income increases, national government expenditure also increases (Arestis et al., 2021). Empirical studies show that Wagner's Law applies in various countries, such as in Spain (Jaén-garcía, 2011), Greece (Antonis et al., 2013), Turkey (Bayrakdar et al., 2015), Romania (Wang et al., 2016), Nigeria (Nwude & Boloupremo, 2018), Pakistan (Munir & Ali, 2019), and Egypt (Eldemerdash & Ahmed, 2019). ...
The purpose of this study is to examine the impact of real GRDP on government expenditure, or vice versa, and to see whether Wagner's law or Keynes' hypothesis applies in existing and newly-split districts/cities in Java and Sumatra, Indonesia. The population is the control variable of this study. The analytical method used is panel data regression. The results show that Wagner's law and Keynes' hypothesis apply both in new districts/cities and in existing districts/cities. In existing districts/cities, the population has a significant positive impact on the real GRDP and government expenditure. However, in new districts/cities, the population has a significant positive impact only on the real GRDP. The implication is that the governments are supposed to allocate their expenditure better so that the economy develops better. The economy must be supported and maintained with appropriate regulations so that the business climate continues to be conducive. A synergy between the government and the business world is needed to support each other.
... Fourth, Ali and Munir (2016) stated that GovS per capita is more accurate in measuring the growth of GovS. He concluded that the elasticity of per capita expenditure should be greater than one so that the Wagner law is true and confirmed. ...
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... Keynesian hypothesis treats demand as a prerequisite for growth. (Ali & Munir, 2016). ...
There are two main approaches in Economic literature, explaining the relationship between government expenditure and economic growth. Wagner’s Law is the first and the second is the Keynesian hypothesis. This study empirically investigated the relationship between government expenditure and economic growth in Sri Lanka for the period of 1977 to 2017 by employing Johansen Co-integration procedure and Granger Causality test; here, the views of Keynes and Wagner were also tested. Augmented Dickey-Fuller (ADF) test results indicated that all series are stationary at the first difference. The results of Co-integrating procedure indicated a long-run equilibrium relationship exists between government expenditure and economic growth. Results of the Granger Causality test suggested government expenditure is depended on and determined by economic growth as stated in Wagner’s Law.
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The study investigating the factors influencing government spending in Pakistan utilizes time-series data spanning from 1980 to 2019. The analysis modifies Wagner's law by incorporating political instability alongside variables such as GDP, debt, inflation, population, trade openness, oil price, and tax revenue. The long-term findings validate Wagner's law in both models, while the short-term results deviate from Wagner's law in Pakistan. This deviation suggests that industrialization progress has enabled the government to improve public expenditure by providing essential facilities. Additionally, the study reveals that the government's active role in national activities leads to an increase in its size. Inflation, population, oil price, real GDP, and political instability exhibit positive and significant connections with government expenditure in the long run for both models. Conversely, debt, nominal GDP, political instability, trade openness, and tax revenue demonstrate negative and significant connections with government expenditure in the long run for both models. However, the short-term results vary between the two models.
zet Wagner Kanunu iktisadi büyümenin kamu harcamaları ile pozitif bir ilişki içinde olduğunu ifade eder. Bu çalışmanın temel amacı Türkiye ekonomisinin 2006q1-2023q4 dönemi için GSYH ile sosyal harcamalar, bileşik öncü göstergeler, tüketici fiyat endeksi arasında uzun ve kısa dönemli ilişkileri araştırmak ve sosyal harcamalar GSYH bağlantısı üzerinden Wagner Kanununa ilişkin sonuçlar elde etmektir. Bu kapsamda belirtilen değişkenler arasındaki ilişki Granger nedensellik testi, Johansen eşbütünleşme testi ve VAR modeli ile araştırılmıştır. Çalışma sonucunda GSYH ile sosyal harcamalar ve TÜFE değişkenleri arasında karşılıklı Granger nedensellik tespit edilirken, GSYH ile bileşik öncü göstergeler endeksi arasında herhangi bir nedensellik tespit edilememiştir. Johansen eşbütünleşme testi ile yapılan tahminde GSYH ile TÜFE arasında %5 anlamlılık düzeyinde eşbütünleşme tespit edilmiştir. Ayrıca VAR yöntemiyle ile yapılan varyans ayrıştırma ve etki/tepki analizlerinde değişkenler arasında kısa dönem ilişkisinin olduğu sonucuna varılmıştır. Abstract Wagner's Law states that economic growth is positively correlated with public expenditures. The main objective of this study is to investigate the long-run and short-run relationship between GDP and social expenditures, composite leading indicators and CPI for the period 2006q1-2023q4 of the Turkish economy and to obtain results regarding Wagner's Law through the connection between social expenditures and GDP. In this context, the relationship between the variables mentioned was investigated with the Granger causality test, Johansen cointegration test and VAR model. Granger causality test revealed that there is a bidirectional causality between GDP and social expenditures and CPI, while no causality was detected between GDP and composite leading indicators index. The Johansen cointegration estimation revealed cointegration between GDP and CPI at 5% significance level. In addition, in the variance decomposition and impulse-response analyses conducted with VAR method, it was concluded that there is a short-term relationship between the variables.
Bu çalışmada gayri safi yurtiçi hasıla, bileşik öncü göstergeler endeksi, sosyal harcamalar ve tüketici fiyat endeksi arasındaki ilişki araştırılmaktadır. Bu kapsamda analiz edilen değişkenler arasındaki kısa dönem nedensellik ilişkisi Granger nedensellik testi, kısa dönem ilişkisi VAR modeli ve uzun dönem ilişkisi ise Johansen eşbütünleşme modeli ile araştırılmıştır. Çalışma sonucunda Granger nedensellik testi ile GSYİH ile SH ve TÜFE değişkenleri arasında karşılıklı nedensellik tespit edilirken, gayri safi yurtiçi hasıla (GSYİH) ile bileşik öncü göstergeler endeksi (BOG) arasında herhangi bir nedensellik tespit edilememiştir. Johansen eşbütünleşme yöntemi ile yapılan tahminde GSYİH ile tüketici fiyat endeksi (TÜFE) arasında %5 anlamlılık düzeyinde eşbütünleşme tespit edilmiştir. Ayrıca VAR analizi ile yapılan varyans ayrıştırma ve etki/tepki analizlerinde bağımsız değişkenlere verilen şoklar karşısında bağımlı değişken olan GSYİH hasılanın olumlu ve olumsuz tepkiler verdiği ve değişkenler arasında kısa dönem ilişkisinin olduğu sonucuna varılmıştır.
This chapter analyses the relationship between nominal gross domestic product and nominal public expenditures in the Czech Republic and the direction of the connection to investigate if the Keynesian relationship holds or Wagner’s law holds. The estimate uses the standard Peacock-Wiseman specification of Wagner’s law and provides the results for the Czech Republic. Our main aim is to identify a long- and/or short-term relationship between the nominal GDP and nominal government expenditures (both current and capital expenditures). We employ a VAR model, Johansen Cointegration test, and VEC model to address this question. The studied period starts in the first quarter of 1999 and ends in the second quarter of 2019. The results support Wagner’s law validity in the long and the Keynesian theory in the short run in the Czech Republic.Key wordsDevelopmentExpendituresPublic financeWagner’s lawKeynesCointegration
