scholarly journals Public Expenditure and Economic Growth: A Test of Wagner’s and Keynes Hypotheses in Nigeria and Angola Economies

2021 ◽  
Vol 1 (3) ◽  
pp. 21-26
Author(s):  
Saliu Mojeed Olanrewaju ◽  
Akeju Kemi Funlayo
Keyword(s):  
Economic Growth ◽  
Health Expenditure ◽  
Capital Investment ◽  
Public Expenditure ◽  
Government Expenditure ◽  
Education Expenditure ◽  
Investment Expenditure ◽  
Long Run ◽  
Johansen Cointegration ◽  
Wagner’S Theory

This study verifies the validation of Wagner’s theory and Keynes's hypothesis between three main government expenditure components (Health expenditure, education expenditure, and capital investment expenditure) and economic growth in Nigeria and Angola. The study employs Johansen cointegration and pairwise granger causality as the estimation techniques. Findings revealed no evidence of long-run relationships with government expenditure components of health, education, and capital investment and economic growth. The study equally reveals the validation of Wagner’s theory between growth and expenditure on health in both Nigeria and Angola. Evidence that confirms both Wagner’s theory and Keynes's hypothesis between growth and expenditure on education in Angola and validation of only Keynes hypothesis in Nigeria was found. Also, the study confirms the validation of Keynes's hypothesis between government expenditure on capital investment in both Nigeria and Angola

Effect of Various Categories of Government Expenditure on Economic Growth in Kenya

2021 ◽  
Vol 3 (1) ◽  
pp. 21-40
Author(s):  
Grace Wambui Kimani ◽  
James Maingi
Keyword(s):  
Economic Growth ◽  
Quantitative Data ◽  
Health Expenditure ◽  
Government Expenditure ◽  
Allocation Of Resources ◽  
Education Expenditure ◽  
Defense Expenditure ◽  
Dependent Variables ◽  
The Government ◽  
Positive Effect

In Kenya, government expenditure has been changing tremendously in its composition and size. Noticeably, since Kenya’s independence, government expenditure has witnessed great expansion. However, the country has not achieved consistent economic growth for a long duration of time. Despite the increase in allocation of resources through increasing public spending, economic growth has not grown at the same rate. As such, economic growth did not consummate with the increase in allocation of resources through government expenditure. The study sought to determine the effect of education expenditure, defense expenditure, health expenditure and infrastructure expenditure on economic growth. It used an explanatory research design and secondary time-series data for the period between 1985 and 2018. Data on education expenditure, defense expenditure, health expenditure as well as infrastructure expenditure and economic growth was acquired from Kenya National Bureau of Statistics. The quantitative data was collected, edited and coded into Statistical software known as STATA version 14. Analysis of the quantitative data was based on descriptive as well as inferential statistics. Correlation analysis was employed to assess the strength of correlation between independent and dependent variables whereas regression analysis determined the weight of association between independent and dependent variables. Diagnostic test was performed to test for the regression model assumptions before carrying out regression analysis. The research focused on autocorrelation test, stationarity test, autocorrelation test, normality as well as heteroscedasticity test. The study revealed that education expenditure had a positive effect on economic growth in Kenya. The study found that defense expenditure had a positive effect on economic growth in Kenya. The results revealed that health expenditure had a positive effect on economic growth in Kenya. In addition, the study found that infrastructure expenditure had a positive effect on economic growth. The study concludes that government expenditure has a significant effect on economic growth in Kenya. The study policy implication of the study is that Kenyan government as well as policy makers should formulate policies and guidelines geared towards increasing education expenditure. This will help in ensuring adequacy in a trained, qualified and productive labor that is important in ensuring an improvement in economic growth. In addition, the government of Kenya should allocate at least 15 percent of their total expenditure to the healthcare so as to ensure a productive and healthy workforce. The government also needs to increase infrastructure funding as recommended by the World Bank to between 7 and 9 percent.

scholarly journals Government Expenditures and Economic Growth

2020 ◽  
Vol 17 (2) ◽  
pp. 241
Author(s):  
Rohaiza Kamis ◽  
Hairul Nizwan Abd Majid ◽  
Nuraida Idora M Ramlee
Keyword(s):  
Economic Growth ◽  
Social Services ◽  
Health Expenditure ◽  
Time Series Data ◽  
Government Expenditure ◽  
Policy Implications ◽  
Government Expenditures ◽  
Series Data ◽  
Education Expenditure ◽  
The Relationship

This paper aims to empirically analyze the relationship between government expenditures and economic growth in Malaysia from 1987 to 2016. This study uses the time series data in identifying the economic growth determinants in Malaysia. The Multiple Linear Regression (MLR) is used to establish the relationship between government expenditure which are education expenditure, health expenditure, defense and security expenditure, and social services expenditure towards the economic growth in Malaysia. The findings for this study indicate all the independent variables have a significant relationship towards economic growth in Malaysia where the health expenditure is the most influenced government expenditure component towards the economic growth in Malaysia. These findings may give some overview of policy implications to the policymakers on optimising the effects of government expenditure on economic development.

scholarly journals Long-Run Relationship Between Fiscal Policy and Economic Growth in Asia: Evidence Using Pedroni’s Cointegration Approach

2020 ◽  
Author(s):  
Hussin Abdullah ◽  
Muzafar Shah Habibullah ◽  
Ahmad Zubaidi BAHARUMSHAH ◽  
Tan Boon Hui
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Government Expenditure ◽  
Budget Balance ◽  
Education Expenditure ◽  
Per Capita Gdp ◽  
The Real ◽  
Distortionary Taxation ◽  
Long Run ◽  
Per Capita

This paper investigates the long-run relationship between fiscal policy and economic growth in Asia between 1982 and 2001 through the application of Pedroni’s Cointegration approach. It examines two different channels through which fiscal policy can affect long-run economic growth in Asian countries. The first channel is when components and aggregate government expenditure affect the real per capita GDP, and the second channel is when the distortionary taxation, budget balance, and aggregate of other fiscal variables affect the real per capita GDP. There is a positive and statistically significant impact of health and education expenditure, aggregate of government expenditure, and aggregate of other fiscal variables on real per capita GDP. It was found that the defence expenditure, distortionary taxation, and budget balance are significantly and negatively related to real per capita GDP. The Pedroni Cointegration result establishes a long-run relationship between fiscal policy and economic growth.  

Economic growth, public expenditure on health and IMR in India

2017 ◽  
Vol 44 (12) ◽  
pp. 2002-2018 ◽  
Author(s):  
Subhalaxmi Mohapatra
Keyword(s):  
Economic Growth ◽  
Health Outcomes ◽  
Health Expenditure ◽  
Public Expenditure ◽  
Panel Cointegration ◽  
Time Frame ◽  
Infant Mortality Rate ◽  
Indian States ◽  
Content Type ◽  
Long Run

Purpose The purpose of this paper is to employ a two-step approach to investigate the bi-directional causal linkage between: economic growth (measured by GDP) and public expenditure on health; public expenditure on health and infant mortality rate (IMR); and economic growth and IMR in the Indian context. Design/methodology/approach The present study uses econometric analysis, namely, panel cointegration and Granger causality on 20-year panel data on 16 major Indian states to investigate the causality. Findings The results suggest GDP to Granger cause public expenditure on health both in the short run and in the long run, but public expenditure on health to Granger cause GDP only in the long run. Further, public expenditure on health and economic growth were found to Granger cause IMR in the long run. However, the reverse linkage from IMR to public expenditure on health and/or economic growth was not significant. Research limitations/implications The present study provides support to the existing literature on the effects of economic growth on health expenditure and health outcomes but also raises a question on the time required to realize the same. Practical implications The findings have implications for policy makers on the time frame and application of health expenditure to achieve better results. Originality/value The present study is one of the first to test the tripartite linkage between economic growth, public health expenditure and health outcomes at a state-level analysis.

scholarly journals Re-Examining the Wagner’s Law versus Keynesian Hypothesis: Evidence from Nigeria

2015 ◽  
Vol 57 ◽  
pp. 142-146 ◽  
Author(s):  
O. Owolabi-Merus
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Public Expenditure ◽  
Capital Expenditure ◽  
Statistical Significance ◽  
Government Expenditure ◽  
Mutual Correlation ◽  
Wagner’S Law ◽  
Johansen Cointegration ◽  
Wagner's Law

This study investigates the Keynesian and Wagnerian views on public expenditure and economic growth in Nigeria using annual secondary data spanning from 1980 to 2011 obtained from the Central bank of Nigeria (CBN) statistical bulletins. The Augmented Dickey-Fuller (ADF), Johansen Cointegration and Granger Causality econometric methodologies were used in this study. The Johansen Cointegration test revealed the presence of a long-run cointegrated relationship between government expenditure (capital expenditure and recurrent expenditure) and economic growth (GDP) in Nigeria. The Granger Causality test found no mutual correlation between government expenditure (capital expenditure and recurrent expenditure) and economic growth (GDP) using the benchmark of 5% level of statistical significance. The findings of this study therefore indicate the non-existence of both Wagner’s Law and Keynesian Hypothesis on public expenditure and economic growth in Nigeria during the period under review.

scholarly journals Impact of Disaggregated Public Expenditure on Unemployment Rate of Selected African Countries: A Panel Dynamic Analysis Approach

2019 ◽  
Vol 1 (2) ◽  
pp. 47-57
Author(s):  
Aphu Elvis Selase
Keyword(s):  
Unemployment Rate ◽  
Health Expenditure ◽  
Public Expenditure ◽  
Generalized Method Of Moments ◽  
High Rate ◽  
Education Expenditure ◽  
African Countries ◽  
Long Run ◽  
Short Run ◽  
The Impact

The study demonstrated the impact of disaggregated public expenditure on unemployment rate in selected African countries with panel data spanning from 2000 to 2017. The data were majorly sourced from the World Bank Indicator. The study employed Generalized Method of Moments (GMM) techniques for empirical analysis. The findings of two-step system GMM showed that expenditure on infrastructure and education reduce unemployment rate, while expenditure on defense and health increase unemployment rate in the region. The short-run elasticity estimate showed that infrastructure and education expenditures reduce unemployment rate by 9% and 1.83%. A unit rise in defense and health expenditure increase unemployment rate by 5.2% and 84.5%. The long-run elasticity of infrastructure and education expenditure reduce unemployment rate by 3.8% and 7.89 %, while the long-run defense and health expenditure elasticity’s increase unemployment rate by 22.22% and 364.58% in the selected African countries. The policy implication is that, the positive relationship between expenditure on health and unemployment could be attributed to mismanagement of government funds due to corruption, while that of defense and unemployment could be high rate of insecurity and crimes in the region. Therefore, the study recommended among others a drastic measure to further improve the education sector through adequate investment in education that will help in skills, development and training. DOI: https://doi.org/10.5281/zenodo.3377972

scholarly journals Nexus between Public Expenditure and Economic Growth in Nepal

2017 ◽  
Vol 40 (1-4) ◽  
pp. 28-43
Author(s):  
R. K. Shah ◽  
Tara Prasad Bhusal
Keyword(s):  
Economic Growth ◽  
Public Expenditure ◽  
Correction Term ◽  
Government Expenditure ◽  
Data Set ◽  
The Public ◽  
Real Gdp ◽  
Long Run ◽  
Bound Test ◽  
The Relationship

The article attempts to identify the relationship between public expenditure and economic growth in Nepal. Public expenditure is a fundamental element for the economic growth. On employing, ARDL bound test on data set for the period of 1975-2016, it is found that there in a long-run relationship between the public expenditure and economic growth. The bound test and error correction term clearly specify that there exists a long run relationship between government expenditure and economic growth in Nepalese economy. From the empirical study, it is found that government expenditure has significant influence on real GDP, which is proxy for economic growth. The study confirms the Keynesian theory of making government expenditure to boost economic growth of Nepal.

ATTAINMENT OF HIGHER ENROLLMENT RATES IN PAKISTAN: A MACROECONOMIC AND ECONOMETRIC STUDY

2012 ◽  
Vol 01 (07) ◽  
pp. 17-29
Author(s):  
Furrukh Bashir ◽  
Shahbaz Nawaz ◽  
Rahat Ullah ◽  
Muhammad Ramzan Arshad ◽  
Munwar Bagum ◽  
...  
Keyword(s):  
Labor Force ◽  
Health Expenditure ◽  
Price Index ◽  
Consumer Price Index ◽  
Government Expenditure ◽  
Government Revenue ◽  
Long Run ◽  
University Enrollment ◽  
Enrollment Rates ◽  
Short Run

Education is always considered as the major determinant for the development of any economy. Enrollment at various levels also shows that how much education is common within the citizens of the country. Considering the importance of enrollment, the current study examines the influence of some macroeconomic variables on various levels i.e. primary, secondary, higher, college, professional and university enrollment in Pakistan. Time series data has been gathered on consumer price index, government revenue, employed labor force, government expenditure, and health expenditure for the period from 1972 to 2010. For long run estimates, Johansen Co integration test is used and short run estimates are taken through error correction model. The results of the study exhibit positive association of employed labor force, government expenditure and health expenditure with primary, secondary, higher, college, professional and university enrollment in Pakistan. On the other side, consumer price index and government revenue have been found to be inversely influencing enrollment at various levels. Short run results are also much favorable for the economy and reveals convergence towards long run equilibrium due to any disturbances in the short run period. At the end study gives some policy implications that government should decrease consumer price index and tax rate and to increase government expenditure in terms of education and health for higher enrollment rates in Pakistan.

scholarly journals Impact of Exchange Rate Management on the Nigerian Economic Growth: Empirical Validation

2019 ◽  
Vol 1 (2) ◽  
pp. 28-35
Author(s):  
Friday Osaru Ovenseri Ogbomo ◽  
Precious Imuwahen Ajoonu
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Least Square ◽  
Ordinary Least Square ◽  
Exchange Rate Management ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper examined the impact of Exchange Rate Management on economic growth in Nigeria between 1980 and 2015. The study was set to gauge how the management of exchange rate in Nigeria has impacted the economy. The study employed the Ordinary Least Square (OLS) method in its analysis. Co-integration and Error Correction Techniques were used to establish the Short-run and Long-run relationships between economic growth and other relevant economic indicators. The result revealed that exchange rate management proxy by various exchange rates regimes in Nigeria was not germane to economic growth. Rather, government expenditure, inflation rate, money supply and foreign direct investment significantly impact on economic growth in Nigeria. It is against this backdrop that the Nigerian economy must diversify her export base to create room for more inflow of foreign exchange.  

scholarly journals AID AND GROWTH IN BANGLADESH: A REASSESSMENT

2018 ◽  
pp. 422-440
Author(s):  
Sharif Hossain ◽  
Rajarshi Mitra ◽  
Thasinul Abedin
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Real Income ◽  
Domestic Investment ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Although the amount of foreign aid received by Bangladesh as a share of GDP has declined over the years, Bangladesh remains one of the heavily aiddependent countries in Asia. The results of most empirical studies that have examined the effectiveness of foreign aid or other forms of development assistance for economic growth have varied considerably depending on the econometric methodology used and the period of study. As the debate and controversy over aid-effectiveness for economic growth continue to grow, this paper reinvestigates the short-run and long-run effects of foreign aid received on percapita real income of Bangladesh over the period 1972–2015. A vector error correction model is estimated. The results indicate lack of any significant short-run and long-run relation between foreign aid and per-capita real income. Results further indicate short-run unidirectional causalities from per-capita real GDP to domestic investment (in proportion to GDP), from government expenditure (in proportion to GDP) to inflation rate, from inflation rate to domestic investment (in proportion to GDP), and from domestic investment to foreign aid (as percentages of GDP). Short-run bidirectional causality is observed between per-capita electricity consumption and per-capita real GDP, and between per-capita real GDP and government expenditure (in proportion to GDP).

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