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Cointegration, causality and Wagner’s law with disaggregated data: evidence from Turkey, 1968-2004

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  • Kucukkale, Yakup
  • Yamak, Rahmi

Abstract

Recent developments in time series analysis have encouraged the economists to re-examine their findings about the Wagner’s Law. That is why, the aggregation in public expenditures may lead some contradictions, disaggregated analyses should perform to have more consistent results. In this paper, the cointegration and causal relationships have re-examined between public expenditure and economic growth by using disaggregated annual data over the period of 1968-2004 for Turkish economy. Obtained results show that there is no common trend between these variables in the long-run. In the short-run, however, there is a strong and bidirectional causal relationship between public investment expenditures and economic growth.

Suggested Citation

  • Kucukkale, Yakup & Yamak, Rahmi, 2012. "Cointegration, causality and Wagner’s law with disaggregated data: evidence from Turkey, 1968-2004," MPRA Paper 36894, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:36894
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    References listed on IDEAS

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    More about this item

    Keywords

    Wagner's Law; Cointegration; Causality; disaggregated data; public expenditures; economic growth;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics

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