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Cointegration, causality and Wagner’s law with disaggregated data: evidence from Turkey, 1968-2004

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  • Kucukkale, Yakup
  • Yamak, Rahmi

Abstract

Recent developments in time series analysis have encouraged the economists to re-examine their findings about the Wagner’s Law. That is why, the aggregation in public expenditures may lead some contradictions, disaggregated analyses should perform to have more consistent results. In this paper, the cointegration and causal relationships have re-examined between public expenditure and economic growth by using disaggregated annual data over the period of 1968-2004 for Turkish economy. Obtained results show that there is no common trend between these variables in the long-run. In the short-run, however, there is a strong and bidirectional causal relationship between public investment expenditures and economic growth.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36894.

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Date of creation: 19 Feb 2012
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Handle: RePEc:pra:mprapa:36894

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Keywords: Wagner's Law; Cointegration; Causality; disaggregated data; public expenditures; economic growth;

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  1. Michael Chletsos & Christos Kollias, 1997. "Testing Wagner's law using disaggregated public expenditure data in the case of Greece: 1958-93," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 29(3), pages 371-377.
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  13. Tobin, Damian, 2005. "Economic Liberalization, the Changing Role of the State and "Wagner's Law": China's Development Experience since 1978," World Development, Elsevier, Elsevier, vol. 33(5), pages 729-743, May.
  14. Halicioglu Ferda, 2003. "Testing Wagner's Law for Turkey, 1960-2000," Review of Middle East Economics and Finance, De Gruyter, De Gruyter, vol. 1(2), pages 31-42, August.
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