Does the Wagner’s Law hold for Thailand? A Time Series Study

Dipendra Sinha

MPRA Paper from University Library of Munich, Germany

Abstract: Wagner’s Law suggests that as the GDP of a country increases, so does its government expenditure. We test for the Law for Thailand using recent advances in econometric techniques. Both total and per capita GDP and government expenditure are used. Ng-Perron unit root tests show that all variables are integrated of order 1. Toda-Yamamoto tests of Granger causality show that there is no causality flowing from either direction between GDP and government expenditure. Autoregressive Distributed Lag (ARDL) tests of cointegration show very weak evidence of a long-run relationship between GDP and government expenditure. Thus, we do not find much evidence that the Wagner’s Law holds for Thailand.

Keywords: Wagner's Law; causality (search for similar items in EconPapers)
JEL-codes: C22 H50 O11 (search for similar items in EconPapers)
Date: 2007-02-26
New Economics Papers: this item is included in nep-pbe and nep-sea
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2560

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