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Public Expenditures and Economic Growth: Was Wagner Right? Evidence from Turkey

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Listed:
  • Gizem Uzuner
  • Festus Victor Bekun
  • Seyi Saint Akadiri

Abstract

Going by Adolph Wagner’s theory, increased in public expenditure would have a significant influence growth. However, the endogenous growth theories posit that public sector either has direct or indirect impacts on economic growth. It is on this premise, we seek to examine and validate Wagner’s theory on the impact of current, investment and transfer expenditures on economic growth over the periods 1975-2014 for Turkey, using Johansen co-integration test and Granger causality test. Findings confirm Wagner’s law through the existence of a long term relationship between the variables, while public expenditures display a significant positive impact on economic growth.

Suggested Citation

  • Gizem Uzuner & Festus Victor Bekun & Seyi Saint Akadiri, 2017. "Public Expenditures and Economic Growth: Was Wagner Right? Evidence from Turkey," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(2), pages 36-40, June.
    • Handle: RePEc:khe:scajes:v:3:y:2017:i:2:p:36-40
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    References listed on IDEAS

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    1. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
    2. Harun TERZİ, 1998. "Kamu Harcamaları ve Ekonomik Kalkınma İlişkisi Üzerine Ekonometrik Bir İnceleme," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 13(142), pages 67-80.
    3. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    4. Yay, Turan & Tastan, Huseyin, 2009. "Growth of Public Expenditures in Turkey during the 1950-2004 Period: An Econometric Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 101-118, December.
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    Cited by:

    1. Phindile Mdluli & Precious Mncayi & Thabang Mc Camel, 2019. "Examining Factors that Drive Government Spending in South Africa," Proceedings of International Academic Conferences 9912246, International Institute of Social and Economic Sciences.
    2. Stephen T. Onifade & Ahmet Ay & Simplice A. Asongu & Festus V. Bekun, 2019. "Revisiting the Trade and Unemployment Nexus: Empirical Evidence from the Nigerian Economy," Research Africa Network Working Papers 19/079, Research Africa Network (RAN).
    3. Gatot Sasongko & Andrian Dolfriandra Huruta & Anita Wardani, 2019. "Does the Wagner's Law exist in a strategic national area? An evidence from Kedungsepur - Indonesia," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 1(2), pages 99-117, June.
    4. Cristian C. Popescu & Laura Diaconu (Maxim), 2021. "Government Spending and Economic Growth: A Cointegration Analysis on Romania," Sustainability, MDPI, vol. 13(12), pages 1-16, June.
    5. Gatot Sasongko & Andrian Dolfriandra Huruta & Anita Wardani, 2019. "Does the Wagner’s Law exist in a strategic national area? An evidence from Kedungsepur - Indonesia," Post-Print hal-02163008, HAL.
    6. Guilherme Correa Petry & Ely José Mattos, 2023. "The Effects of Public Expenditure on Municipal Development: A Dynamic Panel Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(2), pages 695-714, January.

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    More about this item

    Keywords

    Public expenditure; economic growth; cointegration; Granger causality; Turkey;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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