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Empirical Analysis of Wagner’s Law for the Spain’s Regions

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  • Manuel Jaen-Garcia

    (University of Almería)

Abstract

In this paper a panel cointegration analysis is made of both overall development of government expenditure and economic growth in the seventeen Spanish regions (comunidades autónomas, in Spanish). Empirical evidence offers us a positive correlation between public expenditure and per capita GDP that is consistent with Wagner’s Law (WL). A long-run elasticity larger than one suggests a more than proportional increase in public expenditure with respect to economic activity. The principal contribution made by this paper is that, for the first time, empirical testing is carried out on WL, in both its static and dynamic forms, using the methods of unit roots and cointegration in panel data.

Suggested Citation

  • Manuel Jaen-Garcia, 2011. "Empirical Analysis of Wagner’s Law for the Spain’s Regions," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 1(1), pages 1-17, November.
    • Handle: RePEc:hur:ijaraf:v:1:y:2011:i:1:p:1-17
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    References listed on IDEAS

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    1. Nupur Nirola & Sohini Sahu, 2020. "Revisiting the Wagner’s law for Indian States using second generation panel cointegration," Economic Change and Restructuring, Springer, vol. 53(2), pages 241-263, May.

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    More about this item

    Keywords

    Wagner law; public expenditure; cointegration; panel data;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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