Wagner’s Law: A Revision and a New Empirical Estimation

Manuel Jaén-García ()

Hacienda Pública Española / Review of Public Economics, 2018, vol. 224, issue 1, 13-35

Abstract: This study conducts an analysis of the various theoretical and practical problems related to Wagner’s Law on the growth in public spending. As a contribution, and with the intention of offering a new perspective in considering this principle, this paper puts Wagner´s Law to the test for the first time using public employment as a measure of public spending, which is in line with recommendations by Peacock and Scott (2000). In the empirical contrast we use unit root techniques and cointegration with structural breakpoints. The result obtained leads us to reject the law for Spain based on the belief that there are variables other than that GDP which influence public spending growth.

Keywords: Public expenditure; gross domestic product; unit root; cointegration; break points. (search for similar items in EconPapers)
JEL-codes: E62 H11 H50 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:hpe:journl:y:2018:v:224:i:1:p:13-35

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