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Economic growth and government expenditure in China

Author

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  • Sinha, Dipendra

Abstract

In this paper, I study the relationship between government expenditure and GDP in China using modern time series econometric techniques. To my knowledge, there has not been any previous study exploring such relationship for China. The regression results find general support for the existence of a strong positive relationship between government expenditure and GDP. The Granger causality tests indicate that there is some evidence that causality flows from government expenditure to GDP but not the other way around.

Suggested Citation

  • Sinha, Dipendra, 1998. "Economic growth and government expenditure in China," MPRA Paper 18347, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:18347
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    File URL: https://mpra.ub.uni-muenchen.de/18347/1/MPRA_paper_18347.pdf
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    References listed on IDEAS

    as
    1. Schwert, G William, 2002. "Tests for Unit Roots: A Monte Carlo Investigation," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 5-17, January.
    2. Phillips, P.C.B., 1986. "Understanding spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 33(3), pages 311-340, December.
    3. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    4. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    5. Henrekson, Magnus, 1993. "Wagner's Law--A Spurious Relationship?," Public Finance = Finances publiques, , vol. 48(3), pages 406-415.
    6. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    7. James G. MacKinnon, 1990. "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
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    Citations

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    Cited by:

    1. Qing Wang & Ugo Fasano-Filho, 2001. "Fiscal Expenditure Policy and Non-Oil Economic Growth; Evidence from GCC Countries," IMF Working Papers 01/195, International Monetary Fund.
    2. R.A.Susantha Kumara Ranasinghe & Ichihashi Masaru, 2014. "The Composition of Government Expenditure and Economic Growth : The Case of Sri Lanka," IDEC DP2 Series 4-7, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).

    More about this item

    Keywords

    Wagner's law; government expenditure; China;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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