scholarly journals Wagner's Law in Sri Lanka: An Econometric Analysis

2012 ◽  
Vol 2012 ◽  
pp. 1-8 ◽  
Author(s):  
Mayandy Kesavarajah
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Empirical Evidence ◽  
Public Expenditure ◽  
Special Focus ◽  
Annual Data ◽  
Sri Lankan ◽  
Wagner’S Law ◽  
Long Run ◽  
Wagner's Law

This study examines whether there is empirical evidence that Wagner's law holds in the Sri Lankan economy using time series annual data over the period from 1960 to 2010 for Sri Lanka, applying cointegration and error correction modeling (ECM) techniques. In particular, this study keeps a special focus to examine the validity of six versions of Wagner's hypothesis, which support the existence of long-run relationship between public expenditure and economic growth. The empirical evidence of this study indicates that while there prevail is a short-run relationship between public expenditure and economic growth, the long-run results showed no strong evidence in support of the validity of the Wagner’s law for Sri Lankan economy. Granger causality analysis also confirms this result. Therefore, the findings of this study pave to broaden this study further for a deeper understanding about the relationship between public expenditure and economic growth by giving more attention on individual items of public expenditure and by including more macroeconomic variables in the econometric model using different methodology in future.

scholarly journals The Validity of Wagner’s Law in India: A Post-liberalisation Analysis

2019 ◽  
pp. 1-13 ◽  
Author(s):  
Suraj Sharma ◽  
Surendra Singh
Keyword(s):  
Granger Causality ◽  
Urban Population ◽  
Public Expenditure ◽  
Government Expenditure ◽  
National Income ◽  
Causality Test ◽  
Wagner’S Law ◽  
Long Run ◽  
Percent Increase ◽  
Wagner's Law

Aims: The present study attempts to analyse the behavior of government expenditure in relation to national income using most appropriate advanced econometric techniques to test the Wagner’s law of increasing State’s activity in Indian scenario during the post-liberalisation period of 1988 to 2017. Data: The study uses the IMF database entitled “International Financial Statistics” and World Bank database entitled “World Development Indicators” for testing Wagner’s law for the Indian economy. Methodology: The study employs appropriate econometric techniques to our model where government expenditure is used as regressand and gross domestic product and urbanisation is used as regressors. The study first investigates for unit roots in data using ADF and PP tests. Further, to investigate any co-integration among variables the study employed Johansen co-integration test. Once co-integration is confirmed, a vector error correction model has been estimated and lastly, Granger causality test is applied to check for any causality. Results: The results of Vector Error Correction Model reveal that both the Gross Domestic Product and the urban population have a positive and statistically significant effect on government expenditure in the long-run. Ceteris paribus, every 1.0 percent increase in GDP leads 0.36 percent increase in government expenditure. On the other hand, 1.0 percent increase in urban population leads to a 3.75 percent increase in government expenditure. The Granger causality results divulge that there is unidirectional causality running from urban population to government expenditure, whereas neither unidirectional nor bidirectional causality was found between GDP and public expenditure. In short-run, neither GDP nor urban population influences public expenditure. Conclusion: To sum up, the present investigation provides support for Wagner’s law in case of India in the long run only. It has been found that urbanisation has a greater impact on public expenditure than the national income (GDP) and which is also supported by Granger causality test showing significant unidirectional causality running from level of urbanisation to government expenditure.

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.

The Impact Of Unemployment And Interest Rate On Inflation In Sri Lanka

GIS Business ◽  
2018 ◽  
Vol 13 (4) ◽  
pp. 54-65
Author(s):  
S. Selvanayagam ◽  
A.M. M. Mustafa
Keyword(s):  
Sustainable Development ◽  
Interest Rate ◽  
Sri Lanka ◽  
Government Expenditure ◽  
Annual Data ◽  
Sri Lankan ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
The Impact

Three major economic indicators such as Inflation, unemployment and interest rate have an important role in an economy in terms of sustainable development. The long-term progress of the Sri Lankan economy is destabilized. The linkage or the impact among these variables is very important for developing country such as Sri Lanka to overcome the destabilized hurdles. The study intends to investigate the impact of unemployment and interest rate on inflation in Sri Lanka. Also, this study was analyzed the short and long run relationship among the variables. Phillip’s relationship between the variables inflation and unemployment also was discussed in details. Fifty-three years of annual data for period of 1953- 2015 of the variables inflation, unemployment, interest rate, money supply (M2) and government expenditure used for the analysis. Parametric and non-parametric approaches have been employed in this study. The Autoregressive Distributed Lag (ARDL) model with co-integration technique has been employed to find the short and long run relationship of the variable. The statistical package EViews 9 and Microsoft excel were used for the analysis. The study reveals that unemployment is negatively impact on inflation in short and long run in Sri Lanka, which is statistically significance. Further, the study revealed that the Phillip’s relationship between inflation and unemployment exist in Sri Lankan economy. The interest rate is also negatively impact on inflation in short run and positively impact in long run. Results are statistically significance at 5% confidence level and theoretically expected. This study recommends that the relationship between the variables should be noted and utilized the Engine of growth concept in order to achieve sustainable development of Sri Lanka. Job opportunities to be extended further more. Further, the study suggests that using quarterly data to analysis this kind of time series will reflect relationship accurate.

Wagner's law and public expenditure growth in Kuwait

OPEC Review ◽  
1999 ◽  
Vol 23 (2) ◽  
pp. 139-171 ◽  
Author(s):  
Nadeem A. Burney ◽  
Nadia Al-Mussallam
Keyword(s):  
Public Expenditure ◽  
Wagner’S Law ◽  
Expenditure Growth ◽  
Wagner's Law

Sociopolitical Instability and Economic Growth Empirical Evidence from Sri Lanka

2007 ◽  
Vol 4 (12) ◽  
pp. 1029-1035 ◽  
Author(s):  
Changsheng Xu ◽  
Santhirasegaram Selvarathi ◽  
Wen Xing Li
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Empirical Evidence ◽  
Sociopolitical Instability

scholarly journals A validation of Wagner's Law: a case study of Sri Lanka

2017 ◽  
Vol 14 (1) ◽  
pp. 29
Author(s):  
Ali Salman Saleh ◽  
Reetu Verma ◽  
Ranjith Ihalanayake
Keyword(s):  
Sri Lanka ◽  
Wagner’S Law ◽  
Wagner's Law

scholarly journals FDI and Economic Growth in EU13 Countries: Cointegration and Causality Tests

2020 ◽  
Vol 12 (3) ◽  
pp. 47-63
Author(s):  
Vlatka Bilas ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
European Union ◽  
Annual Data ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Panel Ardl ◽  
Long Run ◽  
Causality Tests ◽  
The Relationship

Foreign direct investments are seen as a prerequisite for gaining and maintaining competitiveness. The research objective of this study is to examine the relationship between foreign direct investment (FDI) and economic growth in “new” European Union member countries using various unit root, cointegration, as well as causality tests. The paper employs annual data for FDI and gross domestic product (GDP) from 2002 to 2018 for the 13 most recent members of European Union (EU13): Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. An estimated panel ARDL (PMG) model found evidence that there is a long-run equilibrium between the LogGDP, LogFDI and LogFDIP series, with the rate of adjustment back to equilibrium between 3.27% and 20.67%. In the case of the LogFDI series, long-run coefficients are highly statistically significant in all four models, varying between 0.0828 and 0.3019. These coefficients indicate that a 1% increase in LogFDI increases LogGDP between 0.0828% and 0.3019%. Results of a Dumitrescu-Hurlin panel causality test indicated that a relationship between the GDP growth rate and FDI growth rate is only indirect. Finally, only weak evidence was shown that FDI had a statistically significant impact on GDP in the EU13 countries over the period 2002-2018. This report of findings contributes to the literature concerning FDI and economic growth, namely regarding the current understanding of the relationship between these two factors.

scholarly journals HIGHER EDUCATION AND ECONOMIC GROWTH A CASE STUDY OF PAKISTAN

2010 ◽  
Vol 27 (1) ◽  
Author(s):  
Tariq Mahmood
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Positive Impact ◽  
Public Expenditures ◽  
Annual Data ◽  
Unequal Distribution ◽  
Long Run ◽  
Short Run ◽  
The Impact ◽  
Education And Economic Growth

This paper highlights the role of higher education for the economic growth inPakistan. We explore the impact of increase in enrolment at tertiary level on thegrowth rate of income per worker. Estimating a growth model developed byMankiv et. al. (1992), using the annual data of Pakistan, we find a robustrelationship between higher education and economic growth in the long run. Themodel has also shown that investment in fixed capital has positive impact oneconomic uplift. Applying Johansen’s cointegration test, we show that the longrun elasticity of income with respect to capital stock is different from its share inGDP, and increase in the enrolment per unit of effective worker helps inbolstering economic growth. But, like earlier literature we also find statisticallyinsignificant relationship between higher education and GDP per worker. Thereare some fundamental reasons concerning to the ambiguous impact of investingin human capital on economic growth, particularly in the short run in case ofPakistan. First, the sharp increase in enrollment, recently, has been damaging thequality of education. Second, the unequal distribution of educational services hasheld back the efficiency of public expenditures, particularly before the reformsundertaken by higher education commission. Third, the low private return ofeducation has limited the demand for higher education in Pakistan for almost fiftyyears.

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