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The Wagner’s law testing in the Visegrád Four countries

Author

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  • Tesařová Žaneta

    (Department of Monetary Theory and Policy, Faculty of Finance and Accounting, University of Economics, Prague, Czech Republic)

Abstract

This research paper analyses the relationship between gross domestic product and public expenditures in nominal terms. The analysis is being done by using the standard Peacock-Wiseman specification of the Wagner’s law and provides the results for the Visegrád Four countries, i.e. the Czech Republic, Slovakia, Poland and Hungary. We aim to answer a question concerning the existence of a long and/or short-term relationship between the nominal GDP and nominal public expenditures, which consist of current and capital expenditures. To address this question, we employ the VAR model, the Johansen Cointegration test and the VEC model. We study a period between the first quarter of 1999 and the second quarter of 2019 and find out mixed results for the Visegrád Four countries.

Suggested Citation

  • Tesařová Žaneta, 2020. "The Wagner’s law testing in the Visegrád Four countries," Review of Economic Perspectives, Sciendo, vol. 20(4), pages 409-430, December.
    • Handle: RePEc:vrs:reoecp:v:20:y:2020:i:4:p:409-430:n:1
    DOI: 10.2478/revecp-2020-0020
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    References listed on IDEAS

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    More about this item

    Keywords

    cointegration; economic growth; GDP; Keynesian hypothesis; public expenditures; Visegrád; Wagner’s law;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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