Analysis of the Relationship Between Economic Growth and Public Expenditures with Time-Varying Models: The Case of TR NUTS Level-1

Mustafa Gökmenoğlu () and İsmail Sadık Yavuz ()
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Mustafa Gökmenoğlu: Suleyman Demirel University, Institute of Social Sciences, Isparta, Turkiye
İsmail Sadık Yavuz: Suleyman Demirel University, Institute of Social Sciences, Isparta, Turkiye

Economic Research Guardian, 2025, vol. 15, issue 2, 161-182

Abstract: The study examines the relationship between public expenditures and economic growth for the Nomenclature of Units for Territorial Statistics (NUTS) Level-1 in the period from January 2016 to September 2024. The primary objective of the study is to assess the regional differences in the relationship between variables and to provide an evaluation of the hypotheses. To achieve this, the Time-Varying Konya Panel Causality test has been applied. The tests conducted to understand the relationship between growth, derived from electricity consumption, and COFOG Level-1 expenditures, reveal regional differences based on development levels. Indeed, in regions between TR1-TR7, which can be characterized as developed and densely populated, the findings support the Wagnerian hypothesis. On the other hand, in developing regions between TR8-TRC, the existence of causality from public expenditures to economic growth supports the Keynesian hypothesis.

Keywords: COFOG; Economic growth; Keynes; Wagner; NUTS-1 (search for similar items in EconPapers)
JEL-codes: H50 O40 R11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:15:y:2025:i:2:p:161-182

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