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Evidence of Wagner's law from Indian states

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  • Narayan, Seema
  • Rath, Badri Narayan
  • Narayan, Paresh Kumar

Abstract

In this paper, we test for Wagner's law for 15 Indian states. We consider nine panels of states based on geography and level of economic development. Using panel unit-root, panel-cointegration, and panel-Granger causality analysis, we unravel strong evidence of Wagner's law. However, we find that the Wagner's law relationship is consumption rather than capital expenditure driven. This is a fresh revelation and our results are robust to different model specifications.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 29 (2012)
Issue (Month): 5 ()
Pages: 1548-1557

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Handle: RePEc:eee:ecmode:v:29:y:2012:i:5:p:1548-1557

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Wagner's Law; Indian states; Unit root; Cointegration; Panel data; Heterogeneous;

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