Wagner's Law and the Dynamics of Government Spending in Indonesia
The nature of the empirical relationship between public expenditure and economic growth can be analysed from different viewpoints. This study focuses on the empirical testing of the validity or otherwise of Wagner’s Law for the Indonesian economy. The high growth in the sample period 1980-2014 make...
| Main Authors: | , , |
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| Format: | Journal Article |
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Taylor & Francis
2019
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| Online Access: | http://hdl.handle.net/20.500.11937/82049 |
| _version_ | 1848764465043996672 |
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| author | Inchauspe, Julian Kobir, Moch Abdul MacDonald, Garry |
| author_facet | Inchauspe, Julian Kobir, Moch Abdul MacDonald, Garry |
| author_sort | Inchauspe, Julian |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The nature of the empirical relationship between public expenditure and economic growth can be analysed from different viewpoints. This study focuses on the empirical testing of the validity or otherwise of Wagner’s Law for the Indonesian economy. The high growth in the sample period 1980-2014 make Indonesia a likely candidate for it. Causality and cointegrating techniques are used. A key finding in our vector-autoregression analysis is unidirectional causality running from GDP and Prices to Government Expenditure supporting Wagner’s Law. In the case of Prices and Government Expenditure there is also evidence of a long-run cointegrating relationship, which appears stable and supports unidirectional causality. The vast majority of the deviations from the equilibrium relationship between Government Expenditure and Prices are found to be transitory shocks to Government Expenditure and significantly countercyclical with economic activity, suggesting that government expenditure does play a role in economic stabilisation. |
| first_indexed | 2025-11-14T11:19:47Z |
| format | Journal Article |
| id | curtin-20.500.11937-82049 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:19:47Z |
| publishDate | 2019 |
| publisher | Taylor & Francis |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-820492022-03-31T03:39:56Z Wagner's Law and the Dynamics of Government Spending in Indonesia Inchauspe, Julian Kobir, Moch Abdul MacDonald, Garry The nature of the empirical relationship between public expenditure and economic growth can be analysed from different viewpoints. This study focuses on the empirical testing of the validity or otherwise of Wagner’s Law for the Indonesian economy. The high growth in the sample period 1980-2014 make Indonesia a likely candidate for it. Causality and cointegrating techniques are used. A key finding in our vector-autoregression analysis is unidirectional causality running from GDP and Prices to Government Expenditure supporting Wagner’s Law. In the case of Prices and Government Expenditure there is also evidence of a long-run cointegrating relationship, which appears stable and supports unidirectional causality. The vast majority of the deviations from the equilibrium relationship between Government Expenditure and Prices are found to be transitory shocks to Government Expenditure and significantly countercyclical with economic activity, suggesting that government expenditure does play a role in economic stabilisation. 2019 Journal Article http://hdl.handle.net/20.500.11937/82049 10.1080/00074918.2020.1811837 Taylor & Francis fulltext |
| spellingShingle | Inchauspe, Julian Kobir, Moch Abdul MacDonald, Garry Wagner's Law and the Dynamics of Government Spending in Indonesia |
| title | Wagner's Law and the Dynamics of Government Spending in Indonesia |
| title_full | Wagner's Law and the Dynamics of Government Spending in Indonesia |
| title_fullStr | Wagner's Law and the Dynamics of Government Spending in Indonesia |
| title_full_unstemmed | Wagner's Law and the Dynamics of Government Spending in Indonesia |
| title_short | Wagner's Law and the Dynamics of Government Spending in Indonesia |
| title_sort | wagner's law and the dynamics of government spending in indonesia |
| url | http://hdl.handle.net/20.500.11937/82049 |