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Economic Development and Government Spending: An Exploration of Wagner’s Hypothesis during Fifty Years of Growth in East Asia

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  • Hassan Mohammadi

    (Department of Economics, Illinois State University, Campus Box 4200, Normal, IL 61790-4200, USA)

  • Rati Ram

    (Department of Economics, Illinois State University, Campus Box 4200, Normal, IL 61790-4200, USA)

Abstract

Applicability of Wagner’s hypothesis to six East Asian countries is studied for a period of nearly a half-century during which their economic growth has often been termed as a “miracle”. Despite the high rates of growth in most cases, there is little indication to support the hypothesis except for Japan and possibly Korea. This finding is broadly supported by a variety of tests of cointegration using time-series as well as panel data.

Suggested Citation

  • Hassan Mohammadi & Rati Ram, 2015. "Economic Development and Government Spending: An Exploration of Wagner’s Hypothesis during Fifty Years of Growth in East Asia," Economies, MDPI, vol. 3(4), pages 1-11, October.
    • Handle: RePEc:gam:jecomi:v:3:y:2015:i:4:p:150-160:d:56838
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    3. Philip Arestis & Hüseyin Şen & Ayşe Kaya, 2021. "On the linkage between government expenditure and output: empirics of the Keynesian view versus Wagner’s law," Economic Change and Restructuring, Springer, vol. 54(2), pages 265-303, May.

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