PENGUJIAN WAGNER'S LAW VERSUS KEYNESIAN HYPOTHESIS: PENDEKATAN REGIONAL INDONESIA

In this paper, we tested the Wagner’s Law against the Keynesian Hypothesis for Indonesia using granger causality test. After conducting theoretical and empirical theory, this paper is analysing the relationship between government expenditure and GDP percapita. The long run parameters and causality test found valid Wagners’ Law in Indonesia not Keynesian Hypothesis. The results reveal a positive and statistically significant long run effect running from economic growth toward the government expenditure refer to Wagner’s Law in Indonesia. Further more, the growth of population is giving a positive effect for government expenditure also.

Impact of Government Expenditure on Economic Growth In Sub-Saharan Africa: A Validity of Wagner’s Law

The study investigated the impact of government expenditure on economic growth with special inclination to testing the Wagner’s law in Sub Saharan Africa between 1986 and 2018. Adopting the Panel first generation tests as well as the Panel Auto Regressive Distributed Lag (ARDL) and Pairwise Causality techniques, it was revealed that government expenditure causes economic growth rendering the Wagner’s law is invalid in the Sub-Saharan region. Also, it was further discovered that capital and recurrent expenditure exert negative effect on economic growth while total expenditure has positive effect on economic growth in the region. Therefore, based on the negativity of capital and recurrent expenditure, it is recommended that capital and recurrent expenditure must be monitored effectively to ensure that its increase will not exert any negative effect on economic growth while stringent measures as well as checks and balances must be adopted to curb corruption in Sub-Saharan Africa to ensure that funds are used exclusively for their intended purposes especially those pertaining to capital projects.

The Wagner’s law testing in the Visegrád Four countries

This research paper analyses the relationship between gross domestic product and public expenditures in nominal terms. The analysis is being done by using the standard Peacock-Wiseman specification of the Wagner’s law and provides the results for the Visegrád Four countries, i.e. the Czech Republic, Slovakia, Poland and Hungary. We aim to answer a question concerning the existence of a long and/or short-term relationship between the nominal GDP and nominal public expenditures, which consist of current and capital expenditures. To address this question, we employ the VAR model, the Johansen Cointegration test and the VEC model. We study a period between the first quarter of 1999 and the second quarter of 2019 and find out mixed results for the Visegrád Four countries.

The validity of Wagner’s law in Egypt from 1960–2018

Purpose One of the main theories regarding the relationship between government expenditure and gross domestic product (GDP) is Wagner’s law. This law was developed in the late-19th century by Adolph Wagner (1835–1917), a prominent German economist, and depicts that an increase in government expenditure is a feature often associated with progressive states. This paper aims to examine the validity of Wagner’s law in Egypt for 1960–2018. The relationship between real government expenditure and real GDP is tested using three versions of Wagner’s law. Design/methodology/approach To test the validity of Wagner in Egypt, law time-series analysis is used. The methodology used in this paper is: unit-root tests for stationarity, Johansen cointegration approach, error-correction model and Granger causality. Findings The results provide strong evidence of long-term relationship between GDP and government expenditure. Moreover, the causal relationship is found to be bi-directional. Hence, this study provides support for Wagner’s law in the examined context. Research limitations/implications It should be noted, however, that there are some limitations to this study. For instance, in this paper, the government’s size was measured through government consumption expenditure rather than government expenditure due to data availability, which does not fully capture the government size. Moreover, the data available was limited and does not fully cover the earliest stages of industrialization and urbanization for Egypt. Furthermore, although time-series analysis provides a more contextualized results and conclusions, the obtained conclusions suffer from their limited generalizability. Originality/value This paper aims to specifically make a contribution to the empirical literature for Wagner’s law, by testing the Egyptian data using time-series econometric techniques for the longest time period examined so far, which is 1960–2018.