The objective of this paper is to investigate the validity of Wagner's law within the context of whether it informs the growth of public expenditure for the periods 1970 to 2020 in Liberia. This study analyzed the link between economic growth, captured as Gross Domestic Product (GDP) and government spending in Liberia from 1970 to 2020. The data collected was annual time series data from the World Development Indicator (WDI), Ministry of Finance and Development Planning of Liberia and the World Bank Group website. The data on GDP and government spending were used. Vector error correction (VEC) model which shows the presence of a cointegrating equation or the presence of a long run relationship between the growth of the macroeconomy and the growth of public spending in Liberia was adopted as the suitable methodology to conduct the study. Augmented DF test as well as Unit roots to test for stationarity was used. The author used the Johansen cointegration test to test for long run relationship in the economy. Normality test, Heteroskedasticity as well as LM serial correlation tests for diagnostics were applied. The result showed a strong link between economic growths, captured as GDP and government spending in Liberia over the studied periods and therefore showed that Wagner's Law is valid for the Liberian economy. There are several studies which show the link between the growth of the macroeconomy and the growth of (government spending) in several countries. There has never been any study on the link between these variables (GDP and Government spending) in Liberia. This study is the first of its kind and therefore contributes to the stockpile of existing literatures on Wagner's Law. The law which is a very significant law in the parlance of public finance is attributed to the Wagner when he observed the existence of a pattern between how economy growth relative to how the public envelop grows [15]. Wagner's observed a direct parallel relation between the two variables and concluded that the growth of the macroeconomy is directly associated with the growth of government expenditure.

Inflation and economic growth relationship remain an extensive theoretical and empirical debate in developing countries with regards to monetary policy. The study examines the nexus among economic growth, remittance and inflation in Liberia. The study employed the Granger Causality test to identify if changes in variable of interest temporally precede changes in another, was considered. The VECM specification and result shows a cointegrating equation which indicate a statistically significant long run relationship. The second lag of GDP is positively affecting economic growth significantly. Lag one of inflation showed a significant and positive relation with GDP, hence inflation positively affect economic growth. The result of the VEC Granger Causality/Block exogeneity Wald tests below show Inflation Granger causes GDP in Liberia which is consistent with our ECM result. The result also showed remittance Granger cause GDP in Liberia while inflation Granger causes remittance in the Liberian economy. In conclusion, the study shows that inflation and remit granger caused GDP at a significant level and inflation granger cause remit, hence there is unidirectional causality from inflation to GDP, and from inflation to remit in Liberia.

This research investigated empirically the impact of the government of Liberia (GOL) debt on economic growth from 1970 to 2020. The findings from several studies in different regions of the world present mixed result and at times, controversial results on the impact of debt on the health of a country's economy. Its objective was to ascertain whether debt, both domestically and foreign, has an impact on economic growth in Liberia over the period of 50 years. Despite the theoretical foundation that debt stymied economic growth, the result from the analysis prove contrary to existing body of literature relative to the Liberian economy. The paper reviewed several literatures from various sources and regions to build the foundation for this work. The work used annual time series data of National debt (both domestic and foreign) and Gross domestic product (GDP) as well as annual data for revenue and expenditure for the periods under research. Data for national debt and GDP were obtained from the world development index, the World Bank and the international monetary fund while data for government revenue and government expenditure were both obtained from the fiscal outturn from the ministry of finance and development planning in Liberia. The paper established that there exists a long run relationship between national debt and economic growth in Liberia. It also established that there exist a bidirectional relationship between national debt and economic growth in Liberia.

Liberia is currently experiencing one of its worse economic decline in over a decade. Various explanations are attributable to this decline. The 2014 Ebola Virus disease, the withdrawal of the multinational peace keeping force and the reduction in its primary exports, rubber, timber, etc can all be cited as causes of such decline. To further inflame the anguish of the economy, the 2019 corona virus disease dampened the hopes for further economic repairs. The decline in the global economies weakens the demand for Liberia's primary exports, iron ore and rubber. Given all these shocks, this research investigated the effect of government expenditure on economic growth in Liberia over the last 50 years. The research used vector error correction model to test for long run relationship between the two variables and found that there is a slightly strong long run relationship between government expenditure and growth, but did not find any short run relationship between government spending and growth. This implies that any non-performance of the budget which is the vehicle used to ferry government activities will have an adverse short run implication on the macroeconomy of Liberia. The research used data on government expenditure obtained from the Ministry of Finance and Development planning in Liberia, the World Bank database for economic growth.

The debate of the size of government and economic growth has been popular especially in Africa. This study examined the relationship between fiscal variables, inflation and economic growth in Liberia. The Vector Error Correction Model (VECM) is employed. Results from the Impulse Response Function (IRF) analysis reveal that the response of inflation to growth in the Liberian economy over the study period, was weak, though significant and negative in the short run. However, it became positive and normalized in the medium and long runs. This means that inflation retarded growth only in the short run which is consistent with Barro (1996) empirical findings that inflation impact growth negatively and significantly. Also observed is the relationship between government expenditure and economic growth. For the Liberian economy and despite the interruption of the war, government expenditure impact on growth is a short run positive event, In medium to long run, it has a negative effect. This means that government expenditure only spur growth in the short run slightly but did not bring about growth in the medium to long run. This makes Keynesian theory relative to the intervention of government through spending given rise to growth invalid for the Liberian economy in the long run. However, the impact of growth on expenditure in the medium and long run is significant and strong. This suggests that indeed Wagner’s Law of increasing State spending is valid for the Liberian economy. Hence, fiscal policy is still a mix in stirring economic growth in Liberia. This study recommends well stirred fiscal policies that would positively impact on long run development in the Liberian economy