Wagner’s Hypothesis: An Empirical Verification

Masudul Hasan Adil, Aadil Ahmad Ganaie and B. Kamaiah

IIM Kozhikode Society & Management Review, 2017, vol. 6, issue 1, 1-12

Abstract: This study explores the relationship between public expenditure (PE) and gross domestic product (GDP) to verify whether the Wagner’s hypothesis holds good in the Indian context. We cover the period from 1970 to 2013 and use econometric tools like Autoregressive Distributed Lag Model (ARDL) test to check the long-run and causal relationship among the variables. The results of the bounds test suggest that there exists cointegration between PE and GDP, but we found weak evidence for Wagner’s hypothesis as well.

Keywords: Wagner’s hypothesis; bounds test; cointegration; error correction; public expenditure and GDP. (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:iimkoz:v:6:y:2017:i:1:p:1-12

DOI: 10.1177/2277975216667095

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