Causality between Public Expenditure and Economic Growth: The Turkish Case
AbstractThis paper takes into account recent advances in econometric techniques and examines Wagner’s Law of long-run relationship between public expenditure and GDP for the Turkish case over the period of 1965-2000. The relationship is supposed public expenditure to be an outcome, not cause, of growth in GDP. Causality must run from GDP to public expenditure, not other ways around. Using the co-integration test and the Granger Causality test, we empirically find no causality in both directions; neither Wagner’s Law nor Keynes hypothesis is valid for the Turkish case.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 8576.
Date of creation: 21 Mar 2003
Date of revision: 07 Dec 2003
Publication status: Published in Journal of Economic and Social Research 6.1(2004): pp. 53-72
Public expenditure; economic growth;
Find related papers by JEL classification:
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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