On the linkage between government expenditure and output: empirics of the Keynesian view versus Wagner’s law

Government expenditure and economic growth: does the role of corruption control matter?

“…What is more, the impact of GE on EG is also a research topic that has received great attention in empirical studies. In particular, a number of studies have shown that GE can have a positive impact on EG through improving the quality of public services, encouraging consumption, and promoting private investment (for example: Arestis et al., 2021 ; Arvin et al., 2021 ; Attari and Javed, 2013 ; Bucci and Cozzi, 2021 ; Facchini and Melki, 2013 ; Ghose and Das, 2013 ; Grossman, 1990 ; Odhiambo, 2021 ; Ram, 1986 ; Wu et al., 2010 ). However, others argue that GE can hinder EG if GE is used inefficiently (for instance, Afonso and Furceri, 2010 ; Barro, 1990 ; Butkiewicz and Yanikkaya, 2011 ; Grier and Tullock, 1989 ; Guseh, 1997 ; Hajamini and Falahi, 2018 ; Hansson and Henrekson, 1994 ; Landau, 1985 ; Romero-Ávila and Strauch, 2008 ; Schaltegger and Torgler, 2006 ).…”

Effect of Government Agricultural Expenditure on Economic Growth: Evidence from a Developing Country

“…Similarly, Chu et al, (2020), Amusa and Oyinola (2019), Ndubuisi (2018), Garoma and Bersisa (2018), Selvanathan et al, (2021), Arestis et al, (2021), Lupu et al, (2018), Mazorodze (2018) demonstrated using various analytical techniques that effect of government expenditure on growth depends on the sector recipient or functional component of government expenditure. In relation to government agricultural expenditure and economic growth Shuaib et al (2015), Ebenezer et al, (2019), and Dkhar and De (2018) showed that government expenditure on agriculture does influence agricultural productivity and economic growth positively in Nigeria, South Africa and Russia, respectively.…”

“…However, while some empirical literatures have validated the Keynes theory by demonstrating a positive effect of government expenditure on growth, unidirectional causal relationship from government expenditure to economic growth and bidirectional causal relationship between both economic variables (Diyoke et al 2017;Sedrakyan and Varela-Candamio, 2019;Campo and Mendoza 2018;Ho and Iyke 2020;Ahuja and Pandit 2020;Natarajan et al, 2022;Le 2020;Gurdal et al, 2021), others (Sáez et al 2017;Thabane and Lebina, 2016;Olaoye et al, 2020;Sedrakyan and Varela-Candamio, 2019) negated the Keynes theory in their study by upholding Wagner's rule only or finding no significant relationship between government expenditure and economic growth. Apparently there is an inconclusiveness regarding government expenditure and growth relationship, which could be as a result of dissimilarity in aim, source of financing, size, income level of country and recipient sector of government expenditure (Amusa and Oyinola, 2019;Arestis et al, 2021;Lupu et al, 2018;Selvanathan et al, 2021;Sedrakyan and Varela-Candamio, 2019).…”

Wagner's Law vs. Keynesian Hypothesis: Empirical Evidence for G20 Countries

“…In his study based on Germany and other industrialized countries, Wagner argued that the share of the public sector in the national economy, which is based on the ratio of public expenditures to national products, will increase continuously with industrialization and urbanization [4]. According to Wagner, economic growth is the primary determinant of the change in public expenditures [5].…”