IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Wagner in Ireland: An Econometric Analysis

Listed author(s):
  • Stephen Moore

    (University College Cork, Ireland)

Registered author(s):

    This paper presents an econometric analysis of Wagner’s Law in Ireland for the period 1970-2012. To estimate the long run relationship between government expenditure and gross national product per capita the bounds testing procedure of Pesaran and Shin (2001) is employed. The analysis is performed using both real and nominal variables. The paper finds that although government expenditure has been rising over the period in question the rate of growth has not outpaced growth in GDP per capita, thus weighing against Wagner’s Law. Results are robust across a selection of the most prominent model specifications in the literature, and to the volatility in government spending during the recent crisis. Some policy considerations are also explored.

    If 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.

    File URL: http://www.esr.ie/article/download/506/126/506-1326-1-PB
    Download Restriction: no

    Article provided by Economic and Social Studies in its journal Economic and Social Review.

    Volume (Year): 47 (2016)
    Issue (Month): 1 ()
    Pages: 69-103

    as
    in new window

    Handle: RePEc:eso:journl:v:47:y:2016:i:1:p:69-103
    Contact details of provider: Web page: http://www.esr.ie

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Kojo Menyah & Yemane Wolde-Rufael, 2012. "Wagner'S Law Revisited: A Note From South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 80(2), pages 200-208, June.
    2. Sinha, Dipendra, 2007. "Does the Wagner’s Law hold for Thailand? A Time Series Study," MPRA Paper 2560, University Library of Munich, Germany.
    3. Durevall, Dick & Henrekson, Magnus, 2011. "The futile quest for a grand explanation of long-run government expenditure," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 708-722, August.
    4. Dimitrios Paparas & Christian Richter & Dimitrios Paparas & Anthoula Avloniti, 2012. "The validity of Wagner’s Law in United Kingdom for the period 1850-2010," EcoMod2012 4131, EcoMod.
    5. Dollery, Brian & Singh, Sukhvinder, 1998. "A Note on the Empirical Analysis of Wagner's Law," Economic Analysis and Policy, Elsevier, vol. 28(2), pages 245-257, September.
    6. Christian Richter & Paparas Dimitrios, 2012. "The Validity of Wagner’s Law in the United Kingdom for the Period 1850-2010," Working Papers 2012.9, International Network for Economic Research - INFER.
    7. Halicioglu Ferda, 2003. "Testing Wagner's Law for Turkey, 1960-2000," Review of Middle East Economics and Finance, De Gruyter, vol. 1(2), pages 31-42, August.
    8. Ram, Rati, 1986. "Causality between Income and Government Expenditure: A Broad International Perspective," Public Finance = Finances publiques, , vol. 41(3), pages 393-414.
    9. Johann Bröthaler & Michael Getzner, 2011. "Fiscal Autonomy and Total Government Expenditure: An Austrian Case-study," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(2), pages 134-156, May.
    10. 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.
    11. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    12. Jan Kuckuck, 2012. "Testing Wagner's Law at Different Stages of Economic Development - A Historical Analysis of Five Western European Countries," Working Papers 91, Institute of Empirical Economic Research, Osnabrueck University.
    13. Beck, Morris, 1985. "Public Expenditure, Relative Prices, and Resource Allocation," Public Finance = Finances publiques, , vol. 40(1), pages 17-34.
    14. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    15. Anisul Islam, 2001. "Wagner's law revisited: cointegration and exogeneity tests for the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 8(8), pages 509-515.
    16. Kalam Mohammad Abul & Aziz Nusrate, 2009. "Growth of Government Expenditure in Bangladesh: An Empirical Enquiry into the Validity of Wagner's Law," Global Economy Journal, De Gruyter, vol. 9(2), pages 1-20, June.
    17. Tsangyao Chang & WenRong Liu & Steven Caudill, 2004. "A re-examination of Wagner's law for ten countries based on cointegration and error-correction modelling techniques," Applied Financial Economics, Taylor & Francis Journals, vol. 14(8), pages 577-589.
    18. Stephen Kirchner, 2012. "Federal legislative activism in Australia: a new approach to testing Wagner’s law," Public Choice, Springer, vol. 153(3), pages 375-392, December.
    19. 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.
    20. Evgeny Balatsky, 2012. "Wagner's Law, the Armey-Rahn Curve, and the Paradox of Wealth," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 54(12), pages 40-54, April.
    21. Ganti, Subrahmanyam & Kolluri, Bharat R, 1979. "Wagner's Law of Public Expenditures: Some Efficient Results for the United States," Public Finance = Finances publiques, , vol. 34(2), pages 225-233.
    22. Muthi Samudram & Mahendhiran Nair & Santha Vaithilingam, 2009. "Keynes and Wagner on government expenditures and economic development: the case of a developing economy," Empirical Economics, Springer, vol. 36(3), pages 713-713, June.
    23. Muthi Samudram & Mahendhiran Nair & Santha Vaithilingam, 2009. "Keynes and Wagner on government expenditures and economic development: the case of a developing economy," Empirical Economics, Springer, vol. 36(3), pages 697-712, June.
    24. Asuman Oktayer & Nagihan Oktayer, 2013. "Testing Wagner´s Law for Turkey: Evidence from a Trivariate Causality Analysis," Prague Economic Papers, University of Economics, Prague, vol. 2013(2), pages 284-301.
    25. Serena Lamartina & Andrea Zaghini, 2011. "Increasing Public Expenditure: Wagner's Law in OECD Countries," German Economic Review, Verein für Socialpolitik, vol. 12(2), pages 149-164, 05.
    26. Oxley, Les, 1994. "Cointegration, Causality and Wagner's Law: A Test for Britain 1870-1913," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(3), pages 286-298, August.
    27. Paresh Kumar Narayan & Arti Prasad & Baljeet Singh, 2008. "A test of the Wagner's hypothesis for the Fiji islands," Applied Economics, Taylor & Francis Journals, vol. 40(21), pages 2793-2801.
    28. Rudra Prakash Pradhan, 2007. "Wagner’s Law: Is It Valid in India?," The IUP Journal of Public Finance, IUP Publications, vol. 0(2), pages 7-20, May.
    29. repec:kap:iaecre:v:17:y:2011:i:2:p:134-156 is not listed on IDEAS
    30. Narayan, Paresh Kumar & Nielsen, Ingrid & Smyth, Russell, 2008. "Panel data, cointegration, causality and Wagner's law: Empirical evidence from Chinese provinces," China Economic Review, Elsevier, vol. 19(2), pages 297-307, June.
    31. V. Chandran Govindaraju & Ramesh Rao & Sajid Anwar, 2011. "Economic growth and government spending in Malaysia: a re-examination of Wagner and Keynesian views," Economic Change and Restructuring, Springer, vol. 44(3), pages 203-219, August.
    32. Henrekson, Magnus, 1993. "Wagner's Law--A Spurious Relationship?," Public Finance = Finances publiques, , vol. 48(3), pages 406-415.
    33. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    34. 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.
    35. Chor Foon Tang, 2008. "Wagner’s Law versus Keynesian Hypothesis: New Evidence from Recursive Regression-Based Causality Approaches," The IUP Journal of Public Finance, IUP Publications, vol. 0(4), pages 29-38, November.
    36. Chiung-Ju Huang, 2006. "Government Expenditures In China And Taiwan: Do They Follow Wagner¡¯S Law?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 31(2), pages 139-148, December.
    37. Dluhosch, Barbara & Zimmermann, Klaus W., 2006. "Some Second Thoughts on Wagner's Law," Working Paper 54/2006, Helmut Schmidt University, Hamburg.
    38. Pluta, Joseph E, 1981. "Real Public Sector Growth and Decline in Developing Countries," Public Finance = Finances publiques, , vol. 36(3), pages 439-454.
    39. Kojo Menyah & Yemane Wolde-Rufael, 2013. "Government expenditure and economic growth: the ethiopian experience, 1950–2007," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(1), pages 263-280, January-J.
    40. M. Adetunji Babatunde, 2011. "A bound testing analysis of Wagner's law in Nigeria: 1970-2006," Applied Economics, Taylor & Francis Journals, vol. 43(21), pages 2843-2850.
    41. Ageli, Mohammed Moosa, 2013. "Wagner’s Law in Saudi Arabia 1970 - 2012: An Econometric Analysis," MPRA Paper 46594, University Library of Munich, Germany.
    42. Narayan, Paresh Kumar & Smyth, Russell, 2005. "The residential demand for electricity in Australia: an application of the bounds testing approach to cointegration," Energy Policy, Elsevier, vol. 33(4), pages 467-474, March.
    43. 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.
    44. John Loizides & George Vamvoukas, 2005. "Government expenditure and economic growth: Evidence from trivariate causality testing," Journal of Applied Economics, Universidad del CEMA, vol. 8, pages 125-152, May.
    45. 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.
    46. Hondroyiannis, George & Papapetrou, Evangelia, 1995. "An Examination of Wagner's Law for Greece: A Cointegration Analysis," Public Finance = Finances publiques, , vol. 50(1), pages 67-79.
    47. Henning, John A & Tussing, A Dale, 1974. "Income Elasticity of the Demand for Public Expenditures in the United States," Public Finance = Finances publiques, , vol. 29(3-4), pages 325-341.
    48. Gould, Frank, 1983. "The Development of Public Expenditures in Western, Industrialised Countries: A Comparative Analysis," Public Finance = Finances publiques, , vol. 38(1), pages 38-69.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:47:y:2016:i:1:p:69-103. See general 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: (Martina Lawless)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.