Some Second Thoughts on Wagner's Law
AbstractWe examine whether the Samuelsonian definition of public goods can be reconciled with "Wagner's Law", that is, public expenditures outpacing economic growth. While both predominantly focus on the demand-side, they differ with respect to their socio-political foundations. Taking the latter into account, and acknowledging that empirical studies are not generally supportive of individual income elasticities systematically differing between public and private goods, we find that Wagner's notion of the role of public-sector issues is even at odds with his own dictum. Implicit in Samuelson, by contrast, is the prediction that public spending decreases relative to GNP when income grows, provided that the income distribution remains constant. If this is not the case it can be shown that a growing inequality increases government's share et vice versa which can lead to counteractive forces on the GNP ratio.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Helmut Schmidt University, Hamburg in its series Working Paper with number 54/2006.
Length: 29 pages
Date of creation: Dec 2006
Date of revision:
Wagner's Law; public expenditures; public goods; budget-to-GNP ratio;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Max Steinhardt).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.