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Wagner’s Law: A Revision and a New Empirical Estimation

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  • Manuel Jaén-García

    (Universidad de Almería)

Abstract

This study conducts an analysis of the various theoretical and practical problems related to Wagner’s Law on the growth in public spending. As a contribution, and with the intention of offering a new perspective in considering this principle, this paper puts Wagner´s Law to the test for the first time using public employment as a measure of public spending, which is in line with recommendations by Peacock and Scott (2000). In the empirical contrast we use unit root techniques and cointegration with structural breakpoints. The result obtained leads us to reject the law for Spain based on the belief that there are variables other than that GDP which influence public spending growth.

Suggested Citation

  • Manuel Jaén-García, 2018. "Wagner’s Law: A Revision and a New Empirical Estimation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 224(1), pages 13-35, March.
    • Handle: RePEc:hpe:journl:y:2018:v:224:i:1:p:13-35
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    More about this item

    Keywords

    Public expenditure; gross domestic product; unit root; cointegration; break points.;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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