Wagner's law and Italian disaggregated public spending: some empirical evidences
Wagner’s Law is the first model of public spending in the history of public finance. The aim of this article is to assess its empirical evidence in Italy for the period 1960-2008 at a disaggregated level, using a time-series approach. After a brief introduction, a survey of the economic literature on this issue is shown, before estimating the specifications of Wagner’s Law for some specific items of public spending (for interests, for final consumption, for labour dependent income, for grants on production, and for public investments). We found a cointegration relationship for three out of five items. Moreover, Granger causality tests results show evidence in favour of Wagner’s law only for spending for passive interests in the long-run, and for spending for dependent labour income in the short-run. Some notes on the policy implications of our empirical results conclude the paper.
|Date of creation:||10 Nov 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991.
"Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?,"
Cowles Foundation Discussion Papers
979, Cowles Foundation for Research in Economics, Yale University.
- Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
- Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
- Tom Doan, . "KPSS: RATS procedure to perform KPSS (Kwiatowski, Phillips, Schmidt, and Shin) stationarity test," Statistical Software Components RTS00100, Boston College Department of Economics.
- Singh, Balvir & Sahni, Balbir S, 1984. "Causality between Public Expenditure and National Income," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 630-44, November.
- Bharat Kolluri & Michael Panik & Mahmoud Wahab, 2000. "Government expenditure and economic growth: evidence from G7 countries," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1059-1068.
- Alfonso ARPAIA & Alessandro TURRINI, .
"Government Expenditure and Economic Growth in the EU: Long-Run Tendencies and Short-Term Adjustment,"
- Alfonso Arpaia & Alessandro Turrini, 2008. "Government expenditure and economic growth in the EU: long-run tendencies and short-term adjustment," European Economy - Economic Papers 300, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Ernesto Stein & Ernesto Talvi & Alejandro Grisanti, 1999.
"Institutional Arrangements and Fiscal Performance: The Latin American Experience,"
in: Fiscal Institutions and Fiscal Performance, pages 103-134
National Bureau of Economic Research, Inc.
- Ernesto H. Stein & Ernesto Talvi & Alejandro Grisanti, 1998. "Institutional Arrangements and Fiscal Performance: The Latin American Experience," Research Department Publications 4110, Inter-American Development Bank, Research Department.
- Ernesto Stein & Ernesto Talvi & Alejandro Grisanti, 1998. "Institutional Arrangements and Fiscal Performance: The Latin American Experience," NBER Working Papers 6358, National Bureau of Economic Research, Inc.
- Ernesto H. Stein & Ernesto Talvi & Alejandro Grisanti, 1998. "Institutional Arrangements and Fiscal Performance: The Latin American Experience," IDB Publications (Working Papers) 6435, Inter-American Development Bank.
- Kelley AC, 1976. "Demographic change and the size of the government sector," ILO Working Papers 164876, International Labour Organization.
- Shelton, Cameron A., 2007. "The size and composition of government expenditure," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2230-2260, December.
- Lim, David, 1983. "Instability of government revenue and expenditure in less developed countries," World Development, Elsevier, vol. 11(5), pages 447-450, May.
- Rostow,W. W., 1971. "Politics and the Stages of Growth," Cambridge Books, Cambridge University Press, number 9780521096539.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Dakurah, A. Henry & Davies, Stephen P. & Sampath, Rajan K., 2001. "Defense spending and economic growth in developing countries: A causality analysis," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 651-658, August.
- Massimo Florio & Sara Colautti, 2001. "A logistic growth law for government expenditures: an explanatory analysis," Departmental Working Papers 2001-13, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- Ram, Rati, 1986. "Causality between Income and Government Expenditure: A Broad International Perspective," Public Finance = Finances publiques, , vol. 41(3), pages 393-414.
- Benoit, Emile, 1978. "Growth and Defense in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 26(2), pages 271-80, January.
- Kalam Mohammad Abul & Aziz Nusrate, 2009. "Growth of Government Expenditure in Bangladesh: An Empirical Enquiry into the Validity of Wagner's Law," Global Economy Journal, De Gruyter, vol. 9(2), pages 1-20, June.
- Hassan Mohammadi & Murat Cak & Demet Cak, 2008. "Wagner's hypothesis: New evidence from Turkey using the bounds testing approach," Journal of Economic Studies, Emerald Group Publishing, vol. 35(1), pages 94-106, March.
- Panayiotis C. Afxentiou & Apostolos Serletis, 1991. "A Time-Series Analysis of the Relationship Between Government Expenditure and Gdp in Canada," Public Finance Review, , vol. 19(3), pages 316-333, July.
- Saten Kumar & Don J. Webber & Scott Fargher, 2012. "Wagner's Law revisited: cointegration and causality tests for New Zealand," Applied Economics, Taylor & Francis Journals, vol. 44(5), pages 607-616, February.
- Serena Lamartina & Andrea Zaghini, 2011.
"Increasing Public Expenditure: Wagner's Law in OECD Countries,"
German Economic Review,
Verein für Socialpolitik, vol. 12(2), pages 149-164, 05.
- Lamartina, Serena & Zaghini, Andrea, 2008. "Increasing public expenditures: Wagner's law in OECD countries," CFS Working Paper Series 2008/13, Center for Financial Studies (CFS).
- Saten Kumar & Don J. Webber & Scott Fargher, 2009. "Wagner’s Law Revisited: Cointegration and Causality tests for New Zealand," Working Papers 0917, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
- Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
- Dimitrios Sideris, 2007. "Wagner's Law in 19th Century Greece: A Cointegration and Causality Analysis," Working Papers 64, Bank of Greece.
- Bağdigen, Muhlis & Çetintaş, Hakan, 2003. "Causality between Public Expenditure and Economic Growth: The Turkish Case," MPRA Paper 8576, University Library of Munich, Germany, revised 07 Dec 2003.
- Biswas, Basudeb & Ram, Rati, 1986. "Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 34(2), pages 361-72, January.
- Deger, Saadet & Sen, Somnath, 1983. "Military expenditure, spin-off and economic development," Journal of Development Economics, Elsevier, vol. 13(1-2), pages 67-83.
- Narayan, Paresh Kumar & Nielsen, Ingrid & Smyth, Russell, 2008.
"Panel data, cointegration, causality and Wagner's law: Empirical evidence from Chinese provinces,"
China Economic Review,
Elsevier, vol. 19(2), pages 297-307, June.
- Paresh Kumar Narayan & Ingrid Nielsen & Russell Smyth, 2006. "Panel Data, Cointegration, Causality And Wagner'S Law: Empirical Evidence From Chinese Provinces," Monash Economics Working Papers 01/06, Monash University, Department of Economics.
- Henrekson, Magnus, 1993. "Wagner's Law--A Spurious Relationship?," Public Finance = Finances publiques, , vol. 48(3), pages 406-15.
- Diba, Behzad T, 1982. "A Note on "Public Sector Growth: A Real Perspective."," Public Finance = Finances publiques, , vol. 37(1), pages 114-19.
- William Easterly & Sergio Rebelo, 1993.
"Fiscal Policy and Economic Growth: An Empirical Investigation,"
NBER Working Papers
4499, National Bureau of Economic Research, Inc.
- Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
- Easterly, William & Rebelo, Sérgio, 1994. "Fiscal Policy and Economic Growth: An Empirical Investigation," CEPR Discussion Papers 885, C.E.P.R. Discussion Papers.
- Ram, Rati, 1986. "Comparing evidence on Wagner's hypothesis from conventional and 'real' data," Economics Letters, Elsevier, vol. 20(3), pages 259-262.
- Cameron A. Shelton, 2007. "The Size and Composition of Government Expenditure," Wesleyan Economics Working Papers 2007-002, Wesleyan University, Department of Economics.
- Suleiman Abu-Bader & Aamer Abu-Qarn, 2003.
"Government Expenditures, Military Spending and Economic Growth: Causality Evidence from Egypt, Israel and Syria,"
163, Ben-Gurion University of the Negev, Department of Economics.
- Abu-Bader, Suleiman & Abu-Qarn, Aamer S., 2003. "Government expenditures, military spending and economic growth: causality evidence from Egypt, Israel, and Syria," Journal of Policy Modeling, Elsevier, vol. 25(6-7), pages 567-583, September.
- Abu-Bader, Suleiman & Abu-Qarn, Aamer, 2003. "Government Expenditures, Military Spending and Economic Growth: Causality Evidence from Egypt, Israel and Syria," MPRA Paper 1115, University Library of Munich, Germany.
- Maria Gabriella Briotti, 2005. "Economic reactions to public finance consolidation - a survey of the literature," Occasional Paper Series 38, European Central Bank.
- Faini, Riccardo & Annez, Patricia & Taylor, Lance, 1984. "Defense Spending, Economic Structure, and Growth: Evidence among Countries and Over Time," Economic Development and Cultural Change, University of Chicago Press, vol. 32(3), pages 487-98, April.
- Benedict J. Clements & Christopher Faircloth & Marijn Verhoeven, 2007. "Public Expenditure in Latin America; Trends and Key Policy Issues," IMF Working Papers 07/21, International Monetary Fund.
- Ying-Foon Chow & John Cotsomitis & Andy Kwan, 2002. "Multivariate cointegration and causality tests of Wagner's hypothesis: evidence from the UK," Applied Economics, Taylor & Francis Journals, vol. 34(13), pages 1671-1677.
- John Thornton, 1999. "Cointegration, causality and Wagner's Law in 19th century Europe," Applied Economics Letters, Taylor & Francis Journals, vol. 6(7), pages 413-416.
- Hadjimatheou, G, 1976. "On the Empirical Evidence on Government Expenditure Development," Public Finance = Finances publiques, , vol. 31(1), pages 144-49.
- Akitoby, Bernardin & Clements, Benedict & Gupta, Sanjeev & Inchauste, Gabriela, 2006. "Public spending, voracity, and Wagner's law in developing countries," European Journal of Political Economy, Elsevier, vol. 22(4), pages 908-924, December.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- 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.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:26662. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.