Wagner’s Law and the Dynamics of Government Spending on Indonesia

Inchauspe, Julian; Kobir, Moch Abdul; MacDonald, Garry

doi:10.1080/00074918.2020.1811837

Cited by 13 publications

(9 citation statements)

References 29 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Conceptually, Wagner's law dates to the nineteenth century with Adolph Wagner (see Peacock and Scott 2000). In the modern era, exploring its universality and the conditions under which it holds has been a topic of scholarly interest (see, e.g., Akitoby et al 2006;Grenade and Wright 2014;Inchauspe et al 2022;Jalles 2019;Wagner and Weber 1977). Needless to say, it does not operate as an absolute law, but rather as a regularity or a stylized fact.…”

Section: Data and Discussion Of Literaturementioning

confidence: 99%

Breaking Wagner's Law: Which Countries Have the Most Limited Government?

Murphy

2022

Public Finance Review

View full text Add to dashboard Cite

Which countries have the world's smallest and the world's largest governments? One-fifth of the Economic Freedom of the World index is a subindex scoring the size of government for countries across the world. This subindex is inclusive of the three dimensions of government spending, the top marginal tax rate, and the government ownership of the economy. Measured in this manner, the “smallest” governments are, generally, weak or fragile states. This paper recognizes Wagner's law, the empirical regularity that wealthier countries tend to spend more as a percentage of gross domestic product (GDP). It then performs a novel adjustment to the size of government data to account for Wagner's law, re-scores and re-ranks the countries, and explores the results.

show abstract

Section: Data and Discussion Of Literaturementioning

confidence: 99%

Breaking Wagner's Law: Which Countries Have the Most Limited Government?

Murphy

2022

Public Finance Review

View full text Add to dashboard Cite

show abstract

“…Seung-Joon (2022) analyzed the 38 OECD countries and found that, despite the dynamics varying from country to country in different periods, many countries suggest that there is causality from economic growth to government expansion. Coayla (2021) identified countries with low public spending and high GDP per capita, such as the Macau Special Administrative Region in China and Inchauspe et. al (2022) found the validity of Wagner's law for Indonesia, with unidirectional causality going from GDP growth to public spending.…”

Section: Theoretical Referencementioning

confidence: 99%

The Relationship Between Public Spending and National Income: Empirical Evidence from Brazil from 1997 to 2019

Tessmann¹,

Sachsida²,

Possa³

et al. 2022

R. Econ. and Finan.

View full text Add to dashboard Cite

This paper investigates the existence of a causal relationship between public spending and national income, based on empirical evidence from Brazil, between 1997 and 2019. For this purpose, data on GDP and federal public expenditures were used. Initially, the ADF, Ng Perron and Perrontests were applied to measure the occurrence of unit roots, in I(0), no unitary roots were found, being stationary series. The Causality Test of Granger was then carried out to examine the occurrence of a causal relationship between expenditure and GDP, establishing the temporal precedence between the variables. It was concluded that there is a causal relationship between federal public expenditures and GDP. Thus, depending on the meaning, positive or negative, of this causal link, the approaches that deal with the dynamics of public spending and its causal link with income can be proven by Wagner's Law, Keynesian hypotheses and non-Keynesian hypotheses.

show abstract

“…Testing Wagner's Law with time series analysis: Gunaydın [18], Arısoy [2], Gacener [19], Isik and Alagoz [20], Selen and Eryigit [21], Verma and Arora [22], Tasseven [23], Bansal et al [24], Bayrakdar et al [25], Sanlısoy and Sunal [11], Wang et al [26], Demir and Balki [6], Kumar and Cao [27], Ayad et al [28], Esen et al [29], Inchauspe et al [30], Oseni and Adekunle [31], Ghazy et al [32] and Adewinle et al [33] reached conclusions supporting Wagner's Law. ; Cavusoglu [10], Ighodaro and Oriakhi [34], Kesavarajah [9], Amin and Jannat [35], Akbulut [36], and Jaen-Garcia [37] obtained results that did not support Wagner's Law.…”

Section: Selected Literaturementioning

confidence: 99%

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

Öztaşkın¹,

Kara²

2022

aeb

View full text Add to dashboard Cite

The economic growth-public expenditure relationship is one of the important subjects that both policymakers and scientists focus on during extraordinary conditions such as economic crises, natural disasters or epidemics. Despite the privatization practices and the efforts to adopt the minimal state approach proposed by neoliberalism, which have become widespread significantly since the 1970s, public expenditures increase the interest in the subject. The study analyses the validity of the Keynesian approach, which argues that public expenditures are a fiscal policy tool that supports economic growth, in G-20 countries, as opposed to Wagner's approach, which argues that economic growth is the reason for the increase in public expenditures. The analysis was carried out with the Pesaran CCEMG estimator, which considers cross-sectional dependence and heterogeneity, using annual data from 1994-2017. According to the findings, it could be stated that Wagner's Law is not valid in G-20 countries because the slope coefficient does not fulfil the condition of being more significant than 1, whereas the Keynesian approach is valid. Moreover, a bidirectional causality was discovered between economic growth and public expenditures. Consequently, public expenditures can be used as an effective fiscal policy tool to eliminate economic instabilities under political, economic, or extraordinary conditions such as COVID-19.

show abstract

Wagner’s Law and the Dynamics of Government Spending on Indonesia

Cited by 13 publications

References 29 publications

Breaking Wagner's Law: Which Countries Have the Most Limited Government?

Breaking Wagner's Law: Which Countries Have the Most Limited Government?

The Relationship Between Public Spending and National Income: Empirical Evidence from Brazil from 1997 to 2019

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

Contact Info

Product

Resources

About