Wagner's Law in Sri Lanka: An Econometric Analysis

Kesavarajah, Mayandy

doi:10.5402/2012/573826

Cited by 16 publications

(10 citation statements)

References 16 publications

(14 reference statements)

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“…As it is shown from the result, with rising level of economic growth, the country will likely increase its public investment which clearly related to an evolving demand for goods and services produced by the public sector. This result is in line findings of earlier produced research papers like Richter and Paparas (2012), Kesavarajah (2012), Aregbeyen and Akpan (2013), and Obeng and Sakyi (2017). Another variable that shows positive relationship with public investment is private investment and shows that private investment and government capital spending are moving in tandem.…”

Section: Plot Of Cumulative Sum Of Squares Of Recursive Residualssupporting

confidence: 91%

The determinants of public investment in Ethiopia: An ARDL approach

Tilahun¹

2021

Cogent Economics & Finance

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Public investment has shown increasing trends both in nominal and as a share of GDP over years in Ethiopia. These upsurges in public investment are believed to be due to factors that have visible impact on the fiscal posture of the country. To investigate the validity of Wagner's law in Ethiopia; this study sets determinants of public investment in Ethiopia as a general objective. Specifically, the study sought to examine the main influencing factors on level of public investment in Ethiopia along three sets of explanatory variables. In order to meet the aforementioned objective, the study employed an autoregressive distributed lag (ARDL) approach over the period 1985-2019. Results from the bound tests show that there is a long-run relationship between the variables. The real per capita GDP is found to be positively and significantly impact on level of public investment which shows that there an evidence in favour of Wagner's law,i.e. public spending has a high income elasticity of demand. This study also found that there is a positive relationship between public investment and private investment which shows that two are moving in tandem. Again, the study also found that foreign aid has positive impact on public investment implying that additional foreign aid leads to larger spending of the government on capital. Moreover, the study found that the degree

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Section: Plot Of Cumulative Sum Of Squares Of Recursive Residualssupporting

confidence: 91%

The determinants of public investment in Ethiopia: An ARDL approach

Tilahun¹

2021

Cogent Economics & Finance

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“…This indicates that Wagner's Law is not supported and that the law is not a reality but an ordinary myth in Nigeria during the period under investigation. The result of the study conforms with those of Kesavarajah (2012) and Owolabi (2015) but conflicts with the findings of Aniefiok and Charles (2014) and Tsenba and Gushibet (2016). The study recommends that government should put appropriate fiscal policy in place in order to increase government expenditure for attaining economic growth objective in Nigeria.…”

Section: Conclusion and Policy Recommendationscontrasting

confidence: 49%

Testing the Wagner’s Hypothesis on Public Expenditure and Output Growth Causality in Nigeria

Joseph¹,

Ogungbenle²

2019

RHSS

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This study tests the validity of Wagner's hypothesis on public expenditure and output growth in Nigeria from 1970 -2016 using annual time series data. Phillips Perron unit root test (PP), Johansen cointegration test, Vector Error Correction Model (VECM) and pair wise Granger causality econometric analytical methods were employed. The stationary property of the research variables was confirmed and other tests in the study revealed a unidirectional causation from government expenditure to economic growth in the country. The finding of the study therefore invalidates the applicability of Wagner's hypothesis in Nigeria within the study period. The study recommends the need for appropriate policies on effective utilization of public fund knowing that it has positive effect on the level of economic growth in the country.

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“…investigated the validity of Wagner's law for United States over the period of 1957-2006. By using disaggregated expenditure measures, the study found that total expenditure, insurance trust benefits, social services are co integrated with national income in long run Kesavarajah (2012). studied the Wagner's law for Sri Lanka period from 1960 to 2010 and found validity of Wagner's law only in the short run Moore (2016).…”

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confidence: 99%

Wagner hypothesis in India: An empirical investigation from pre and post reform period

Rani¹,

Kumar

2020

Journal of Public Affairs

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The present study empirically examines the validity of Wagner's hypothesis for Indian economy in pre (1967–1990) and post (1991–2015) reform period. The study examined six alternatives versions of Wagner's hypothesis. The long‐run relationship between government expenditure and economic growth is tested using ARDL model while causal relationship has been investigated using Granger causality test. The results found strong evidence of Wagner's hypothesis during post reform period while the elasticity of government expenditure to economic growth is low in pre reform period. Further, results indicate that unidirectional causality is moving from economic growth to government expenditure in all versions of Wagner's hypothesis.

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Wagner's Law in Sri Lanka: An Econometric Analysis

Cited by 16 publications

References 16 publications

The determinants of public investment in Ethiopia: An ARDL approach

The determinants of public investment in Ethiopia: An ARDL approach

Testing the Wagner’s Hypothesis on Public Expenditure and Output Growth Causality in Nigeria

Wagner hypothesis in India: An empirical investigation from pre and post reform period

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