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The government expenditure-economic growth relation in Japan: an analysis by using the ADL test for threshold cointegration

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  • Hiroshi Ono

Abstract

Based on annual data from Japan for the period 1960 to 2010, we investigate the government expenditure-economic growth relation in Japan by using the autoregressive distributed lag test for threshold cointegration developed by Li and Lee (2010). In particular, we evaluate the validity of Wagner's view and the Keynesian view in the case of Japan. The empirical results presented herein indicate that of these two classical economics perspectives, only Wagner's view holds for Japan. The findings also demonstrate that the adjustment process towards its long-run equilibrium is asymmetric.

Suggested Citation

  • Hiroshi Ono, 2014. "The government expenditure-economic growth relation in Japan: an analysis by using the ADL test for threshold cointegration," Applied Economics, Taylor & Francis Journals, vol. 46(28), pages 3523-3531, October.
  • Handle: RePEc:taf:applec:v:46:y:2014:i:28:p:3523-3531
    DOI: 10.1080/00036846.2014.932046
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    References listed on IDEAS

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    Cited by:

    1. Ahmad, Ahmad Hassan & Aworinde, Olalekan Bashir, 2016. "The role of structural breaks, nonlinearity and asymmetric adjustments in African bilateral real exchange rates," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 144-159.
    2. repec:sos:sosjrn:180201 is not listed on IDEAS
    3. 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.

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