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Does the Wagner’s Law hold for Thailand? A Time Series Study

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  • Sinha, Dipendra

Abstract

Wagner’s Law suggests that as the GDP of a country increases, so does its government expenditure. We test for the Law for Thailand using recent advances in econometric techniques. Both total and per capita GDP and government expenditure are used. Ng-Perron unit root tests show that all variables are integrated of order 1. Toda-Yamamoto tests of Granger causality show that there is no causality flowing from either direction between GDP and government expenditure. Autoregressive Distributed Lag (ARDL) tests of cointegration show very weak evidence of a long-run relationship between GDP and government expenditure. Thus, we do not find much evidence that the Wagner’s Law holds for Thailand.

Suggested Citation

  • Sinha, Dipendra, 2007. "Does the Wagner’s Law hold for Thailand? A Time Series Study," MPRA Paper 2560, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:2560
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    References listed on IDEAS

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    Cited by:

    1. Kumar, Saten, 2009. "Further Evidence on Public Spending and Economic Growth in East Asian Countries," MPRA Paper 19298, University Library of Munich, Germany.
    2. Alfred Wu & Mi Lin, 2012. "Determinants of government size: evidence from China," Public Choice, Springer, vol. 151(1), pages 255-270, April.
    3. Cosimo Magazzino, 2012. "The Nexus between Disaggregated Public Spending and GDP in the Euro Area," Economics Bulletin, AccessEcon, vol. 32(3), pages 2560-2579.
    4. Yusuf Shamsuddeen Nadabo & Suleiman Maigari Salisu, 2021. "Investigating the Expenditure-Economic Growth Nexus in Nigeria the Presence of Structural Breaks: A Nonlinear ARDL Cointegration Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(09), pages 146-153, September.
    5. Saten Kumar & Don J. Webber & Scott Fargher, 2012. "Wagner's Law revisited: cointegration and causality tests for New Zealand," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 607-616, February.
    6. Magazzino, Cosimo, 2012. "Wagner versus Keynes: Public spending and national income in Italy," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 890-905.
    7. Stephen Moore, 2016. "Wagner in Ireland: An Econometric Analysis," The Economic and Social Review, Economic and Social Studies, vol. 47(1), pages 69-103.
    8. Nicholas Awuse & Patrick Tandoh-Offin, 2014. "A Quantitative and Theoretical Analysis of Ghana's Internal Migration, Economic Growth and poverty Reduction: A Disaggregated Approach, from 1980 to 2012," Business and Economic Research, Macrothink Institute, vol. 4(1), pages 14-22, June.
    9. Oluwasegun Eseyin & Elizabeth Oloni & Olufemi Ogunjobi & Fadeke Abiodun, 2021. "Governance and Youth Unemployment in Nigeria," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(1), pages 220-231, January.
    10. Emmanuel Ziramba, 2008. "Wagner'S Law: An Econometric Test For South Africa, 1960‐2006," South African Journal of Economics, Economic Society of South Africa, vol. 76(4), pages 596-606, December.
    11. Omoshoro-Jones, Oyeyinka Sunday, 2016. "A Cointegration and Causality Test on Government Expenditure –Economic Growth Nexus: Empirical Evidence from a South African Province," MPRA Paper 102085, University Library of Munich, Germany, revised 17 Oct 2017.
    12. Asuman Oktayer & Nagihan Oktayer, 2013. "Testing Wagner's Law for Turkey: Evidence from a Trivariate Causality Analysis," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(2), pages 284-301.

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    More about this item

    Keywords

    Wagner's Law; causality;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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