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The Displacement Hypothesis and Government Spending in the United Kingdom: some new Long-Run Evidence

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  • Henry, O.
  • Olekalns, N.

Abstract

This paper presents new evidence on the ability of Peacock and Wiseman's displacement hypothesis to explain temporal increases in the ratio of government expenditure to GDP in the United Kingdom. Using univariate modelling techniques that are robust to structural changes in the underlying data generating process and a data set extending back to 1836, we find four instances where displacement may be said to have occurred.

Suggested Citation

  • Henry, O. & Olekalns, N., 2000. "The Displacement Hypothesis and Government Spending in the United Kingdom: some new Long-Run Evidence," Department of Economics - Working Papers Series 750, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:750
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    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-00-01/750.pdf
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    References listed on IDEAS

    as
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    5. Crosby, M. & Olekalns, N., 1998. "Some Long Run Evidence on Tax Smoothing," Department of Economics - Working Papers Series 609, The University of Melbourne.
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    More about this item

    Keywords

    FISCAL POLICY ; PUBLIC EXPENDITURES;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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