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Keynes versus Wagner: public expenditure and national income for three African countries

Author

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  • M. I. Ansari
  • D. V. Gordon
  • C. Akuamoah

Abstract

The public expenditure/income hypothesis has long been debated in economics. Following Keynes, public expenditure is seen as an exogenous factor to be used as a policy instrument to influence growth. On the other hand, Wagner argues that expenditure is an endogenous factor or an outcome, not a cause, of growth in national income. The purpose of this paper is to apply both the Granger and Holmes-Hutton statistical procedures to test the income-expenditure hypothesis for three African countries-Ghana, Kenya and South Africa. We find that the hypothesis of public expenditure causing national income is not supported by the data for these African countries.

Suggested Citation

  • M. I. Ansari & D. V. Gordon & C. Akuamoah, 1997. "Keynes versus Wagner: public expenditure and national income for three African countries," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 543-550.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:4:p:543-550
    DOI: 10.1080/000368497327038
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    References listed on IDEAS

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