The Causal Nexus between Government Expenditure and Economic Growth: Wagner versus Keynes Hypothesis
Siok Kun Sek,
Khang Yi Sim,
Wei Keat Chea
et al.
Abstract:The causality between economic growth and government expenditure has long been a topic of interest among economists. Theoretically, Wagner’s law claimed that economic growth (EG) contributes to government expenditure (GE), while the opposite causal nexus was claimed by Keynes. This study seeks to test the validity of these two theories by examining four versions of functional hypotheses and their reverse functions: Gupta, Peacock and Wiseman, Musgrave, and Mann. The main objectives include examining the nexus … Show more
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