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Wagner's hypothesis: evidence from Kuwait using cointegration tests

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  • Nadeem Burney

Abstract

This paper investigates the relationship between public expenditure and a number of socioeconomic variables, including the level of income, in Kuwait. A general form of the public expenditure function is formulated and recent developments in time series econometrics, including unit roots and cointegration tests, and an error-correction model are used. Given the characteristics of the economy, alternative measures for each variables are used. The analysis in the paper is based on time-series data covering the period from 1969/70 to 1994/95. In general, the findings lend little support to the existence of long-run equilibrium relationship between public expenditure and the socioeconomic variables, and the evidence does not lend support to the validity of Wagner's law in Kuwait.

Suggested Citation

  • Nadeem Burney, 2002. "Wagner's hypothesis: evidence from Kuwait using cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 34(1), pages 49-57.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:1:p:49-57
    DOI: 10.1080/00036840010027540
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