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Wagner’s Law in Saudi Arabia 1970 - 2012: An Econometric Analysis

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  • Mohammed MoosaAgeli

    (Assistant Professor of Economics, King Saud University, Riyadh, Saudi Arabia)

Abstract

Our goal in this paper is to explorethe validity of Wagner’s Law in Saudi Arabia during the period (1970-2012) for real oil GDP and Non-oil GDP.Wagner’s Law investigated that fundamental economic growth is validity to the public sector growth. In the previousstudies have been tested the six versions of Wagner’s law to support the existence of long-run relationship between government expenditure and economic growth.We used a method as a time series econometrics techniques to examine how far Wagner’s Law validity can be applied in Saudi economy. The results obtained from the analyses find that the Wagnerian proposition can explain the growth of government in Saudi Arabia, which holds for both the oil and non-oil income cases. The findings also note that the existence of strong causality for all of Wagner’s law versions in the long run.

Suggested Citation

  • Mohammed MoosaAgeli, 2013. "Wagner’s Law in Saudi Arabia 1970 - 2012: An Econometric Analysis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(5), pages 647-659, May.
  • Handle: RePEc:asi:aeafrj:2013:p:647-659
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    References listed on IDEAS

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    5. Bharat Kolluri & Michael Panik & Mahmoud Wahab, 2000. "Government expenditure and economic growth: evidence from G7 countries," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1059-1068.
    6. Michas, Nicholas A, 1975. "Wagner's Law of Public Expenditures: What Is the Appropriate Measurement for a Valid Test?," Public Finance = Finances publiques, , vol. 30(1), pages 77-85.
    7. Granger, C. W. J., 1980. "Testing for causality : A personal viewpoint," Journal of Economic Dynamics and Control, Elsevier, vol. 2(1), pages 329-352, May.
    8. Alan T. Peacock & Jack Wiseman, 1961. "The Growth of Public Expenditure in the United Kingdom," NBER Books, National Bureau of Economic Research, Inc, number peac61-1, December.
    9. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    10. Abizadeh, Sohrab & Yousefi, Mahmood, 1998. "An empirical analysis of South Korea's economic development and public expenditures growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 27(6), pages 687-700.
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    Cited by:

    1. repec:eso:journl:v:47:y:2016:i:1:p:69-103 is not listed on IDEAS
    2. Ali, Wajid & Munir, Kashif, 2016. "Testing Wagner versus Keynesian Hypothesis for Pakistan: The Role of Aggregate and Disaggregate Expenditure," MPRA Paper 74570, University Library of Munich, Germany.
    3. Faqeer Muhammad & Tongsheng Xu & Rehmat Karim, 2015. "Impact of Expenditure on Economic Growth in Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(2), pages 231-236, February.

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