Reconsidering Wagner's Law: evidence from the functions of the government

Antonio Afonso and José Alves

No 2016/09, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: We revisitWagner's law of increasing state expenditure by function of government expenditure. Using data of 14 European countries between 1996 and 2013, we apply panel data and SUR methods to assess public expenditure-income elasticities. We find that some functions of government spending for a few countries (e.g. Austria, France, the Netherlands, and Portugal) validate Wagner's law. For the Netherlands expenditures with environment protection increase more than proportionately to economic growth, and for France that is the case of spending in housing and community amenities. In addition, Greece is the only country where two public spending items react more than one to one to growth. Key Words : Fiscal Policies; Government spending; SUR estimation; Wagner's Law.

JEL-codes: C33 E62 H50 O47 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-eec and nep-mac
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Citations: View citations in EconPapers (7)

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Journal Article: Reconsidering Wagner’s law: evidence from the functions of the government (2017)
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