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Wagner’s Law in Saudi Arabia 1970 - 2012: An Econometric Analysis

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  • Ageli, Mohammed Moosa

Abstract

Our goal in this paper is to explore the validity of Wagner’s Law in Saudi Arabia during the period (1970-2012) for real oil GDP and Non-oil GDP. Wagner’s Law investigated that fundamental economic growth is validity to the public sector growth. In the previous studies have been tested the six versions of Wagner’s law to support the existence of long-run relationship between government expenditure and economic growth. We used a method as a time series econometrics techniques to examine how far Wagner’s Law validity can be applied in Saudi economy. The results obtained from the analyses find that the Wagnerian proposition can explain the growth of government in Saudi Arabia, which holds for both the oil and non-oil income cases. The findings also note that the existence of strong causality for all of Wagner’s law versions in the long run.

Suggested Citation

  • Ageli, Mohammed Moosa, 2013. "Wagner’s Law in Saudi Arabia 1970 - 2012: An Econometric Analysis," MPRA Paper 46594, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:46594
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    File URL: https://mpra.ub.uni-muenchen.de/46594/1/MPRA_paper_46594.pdf
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    References listed on IDEAS

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    1. Bagala Biswal & Urvashi Dhawan & Hooi-Yean Lee, 1999. "Testing Wagner versus Keynes using disaggregated public expenditure data for Canada," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1283-1291.
    2. Abizadeh, Sohrab & Yousefi, Mahmood, 1988. "An empirical re-examination of Wagner's law," Economics Letters, Elsevier, vol. 26(2), pages 169-173.
    3. Nadeem Burney, 2002. "Wagner's hypothesis: evidence from Kuwait using cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 34(1), pages 49-57.
    4. Abizadeh, Sohrab & Yousefi, Mahmood, 1998. "An empirical analysis of South Korea's economic development and public expenditures growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 27(6), pages 687-700.
    5. Michael Chletsos & Christos Kollias, 1997. "Testing Wagner's law using disaggregated public expenditure data in the case of Greece: 1958-93," Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 371-377.
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    Cited by:

    1. repec:eso:journl:v:47:y:2016:i:1:p:69-103 is not listed on IDEAS
    2. 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.
    3. Faqeer Muhammad & Tongsheng Xu & Rehmat Karim, 2015. "Impact of Expenditure on Economic Growth in Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(2), pages 231-236, February.

    More about this item

    Keywords

    Wagner’s Law; Co-integration; Error Correction Model (ECM); Augmented Dickey Fuller (ADF); Government Expenditure; Economic Growth; Saudi Arabia;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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