The association between government expenditure and economic growth: granger causality test of us data, 1947-2002

Liu, Louis Chih-hung; Hsu, Chiehwen Ed; Younis, Mustafa Z

doi:10.1108/jpbafm-20-04-2008-b002

Cited by 43 publications

(33 citation statements)

References 7 publications

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“…However, there exists a negative short run relationship between one lag levels of government capital expenditure and manufacturing output. The empirical result of positive relationship between manufacturing output and government capital expenditure is in agreement with the findings of Chih-Hung Liu, et al (2008), Mwafaq (2011), Muritala and Taiwo (2011), Sikiru and Umaru (2011) and Njoku, Okezie, and Ngozi (2014), which confirms that large public expenditure has positive and significant impact on economic growth which may be brought about through its influence on manufacturing output in the Nigerian economy. Interestingly, the result reveals that recurrent expenditure at level and its lagged value have negative effect on manufacturing output.…”

Section: Resultssupporting

confidence: 79%

“…Several empirical studies are country-specific using time series data across several years while others are cross-country utilizing panel or cross sectional data. Chih-Hung Liu, et al (2008) investigated the causal relationship between GDP and public expenditures for US federal government covering the time series data 1974-2002, they found in this study that total expenditure does cause the growth of GDP, which is consistent with the Keynesian theory. However, the growth of GDP does not cause the increase in total public expenditure which is inconsistent with Wagner's law.…”

Section: Business and Economic Researchsupporting

confidence: 60%

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Effect of Government Capital Expenditure on Manufacturing Sector Output in Nigeria

Emmanuel

Oladiran

2015

BER

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The study investigates the relationship between government expenditure and manufacturing sector output in Nigeria. Government expenditure is disaggregated into capital and recurrent with a view to analyse the relative effect of these categories of government expenditure with emphasis on the capital component. The study employed time series data from 1970 to 2013. Data on manufacturing sector output, capital and recurrent expenditure, nominal and real Gross Domestic Product (GDP), exchange rate and interest rate were collected from Statistical Bulletin and Annual Report and Statement of Accounts published by the Central Bank of Nigeria (CBN). Econometric evidence revealed stationarity of the variables of interest at their first difference while the Johansen cointegration approach also confirms the existence of one cointegrating relationship at 5 percent level of significance. In addition, error correction estimates revealed that while government capital expenditure has positive relationship with manufacturing sector output in Nigeria, recurrent expenditure exerts negative effect on manufacturing sector output. The results showed that one per cent increase in government capital expenditure resulted in an increase of 11.2 per cent in manufacturing sector output while recurrent expenditure decreases it by 26.9 per cent. This reveals that ISSN 2162-4860 2015 www.macrothink.org/ber 137 government capital expenditure has positive impact on manufacturing sector output. The study therefore suggests that larger percentage of government expenditure in the annual budget should be on capital component coupled with improved implementation of expenditure policies rather than recurrent expenditure which does not really have a significant impact on the manufacturing sector. Business and Economic Research

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Section: Resultssupporting

confidence: 79%

Section: Business and Economic Researchsupporting

confidence: 60%

Effect of Government Capital Expenditure on Manufacturing Sector Output in Nigeria

Emmanuel

Oladiran

2015

BER

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“…However, in the most recent contribution to the subject by Narayan and Singh (2007) the authors report that their findings are consistent with the Keynesian school of thought. Liu et al (2008) present results on the association between public expenditure and economic growth using aggregate US data as well as disaggregate data with subcategories including national defence, human resource expenditure, physical resources expenditure, net interest payment and other expenditure. The results are mostly consistent with Keynesian theory.…”

Section: Literature Overviewmentioning

confidence: 99%

The relationship between budgetary expenditure and economic growth in Poland

Gurgul

Mestel

2011

Cent Eur J Oper Res

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This paper investigates the association between different kinds of budgetary expenditure and economic growth of Poland. The empirical analysis makes use of linear and nonlinear Granger causality tests to evaluate the applicability of Wagner's Law and that of the contrasting Keynesian theory. We employ aggregate and disaggregate data with the sub-categories of most important budgetary expenditure, including health care and social security, education and science, national defence and public security expenditure and government administration expenditure for the period Q1 2000 to Q3 2008. This causality analysis indicates that total relation between budgetary expenditure and economic growth is consistent with Keynesian theory. The results of our computations have important policy implications. In case of Poland the health care expenditure was found to be as important for economic growth as expenditures on education and science. Furthermore, in order to stimulate economic growth, Polish government should consider reallocating some of national defence, public security and government administration expenditure to health care, social security, education and science expenditure.

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“…Liu et al [31] examined the causal relationship between GDP and public expenditure for United States of America using data from the period 1947-2002. The causality results revealed that total government expenditure causes growth of GDP.…”

Section: Empirical Literaturementioning

confidence: 99%

The Contribution of Government Expenditure on Economic Growth of Nigeria Disaggregated Approach

Iheanacho¹

2016

Int J Econ Manag Sci

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The association between government expenditure and economic growth: granger causality test of us data, 1947-2002

Cited by 43 publications

References 7 publications

Effect of Government Capital Expenditure on Manufacturing Sector Output in Nigeria

Effect of Government Capital Expenditure on Manufacturing Sector Output in Nigeria

The relationship between budgetary expenditure and economic growth in Poland

The Contribution of Government Expenditure on Economic Growth of Nigeria Disaggregated Approach

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