Increasing Public Expenditure: Wagner’s Law in OECD Countries

Lamartina Serena and Andrea Zaghini
Additional contact information
Lamartina Serena: European Central Bank,Frankfurt, Germany

German Economic Review, 2011, vol. 12, issue 2, 149-164

Abstract: The paper proposes a panel cointegration analysis of the joint development of government expenditure and economic growth in 23 Organization Economic Cooperation and Development countries. The empirical evidence provides indication of a structural positive correlation between public spending and per-capita gross domestic product (GDP), which is consistent with the so-called Wagner’s law. A long-run elasticity larger than 1 suggests a more than proportional increase of government expenditure with respect to economic activity. In addition, according to the spirit of the law, we found that the correlation is usually higher in countries with lower per-capita GDP, suggesting that the catching-up period is characterized by a stronger development of government activities with respect to economies in a more advanced state of development.

Keywords: Fiscal policy; Wagner’s Law; panel cointegration (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://doi.org/10.1111/j.1468-0475.2010.00517.x (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Journal Article: Increasing Public Expenditure: Wagner's Law in OECD Countries (2011)
Working Paper: Increasing public expenditures: Wagner's law in OECD countries (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:germec:v:12:y:2011:i:2:p:149-164

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ger/html

DOI: 10.1111/j.1468-0475.2010.00517.x

Access Statistics for this article

German Economic Review is currently edited by Peter Egger, Almut Balleer, Jesus Crespo-Cuaresma, Mario Larch, Aderonke Osikominu and Georg Wamser

More articles in German Economic Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().