Wagnerâ€™s Law versus Keynesian Hypothesis: Evidence from pre-WWII Greece
Antoniou Antonis (),
Constantinos Katrakilidis () and
Persefoni Tsaliki ()
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Antoniou Antonis: State General Archives of Greece, Greece
Panoeconomicus, 2013, vol. 60, issue 4, 457-472
With data of over a century, 1833-1938, this paper attempts, for the first time, to analyze the causal relationship between income and government spending in the Greek economy for such a long period; that is, to gain some insight into Wagner and Keynesian Hypotheses. The time period of the analysis represents a period of growth, industrialization and modernization of the economy, conditions which are conducive to Wagnerâ€™s Law but also to the Keynesian Hypothesis. The empirical analysis resorts to Autoregressive Distributed Lag (ARDL) Cointegration method and tests for the presence of possible structural breaks. The results reveal a positive and statistically significant long run causal effect running from economic performance towards the public size giving support to Wagnerâ€™s Law in Greece, whereas for the Keynesian hypothesis some doubts arise for specific time sub-periods.
Keywords: Wagnerâ€™s Law; Economic growth; ARDL cointegration; Causality (search for similar items in EconPapers)
JEL-codes: H50 E69 E62 C22 C51 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:voj:journl:v:60:y:2013:i:4:p:457-472
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