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Wagner’s Law in Saudi Arabia 1970 - 2012: An Econometric Analysis

Mohammed Ageli ()

MPRA Paper from University Library of Munich, Germany

Abstract: Our goal in this paper is to explore the validity of Wagner’s Law in Saudi Arabia during the period (1970-2012) for real oil GDP and Non-oil GDP. Wagner’s Law investigated that fundamental economic growth is validity to the public sector growth. In the previous studies have been tested the six versions of Wagner’s law to support the existence of long-run relationship between government expenditure and economic growth. We used a method as a time series econometrics techniques to examine how far Wagner’s Law validity can be applied in Saudi economy. The results obtained from the analyses find that the Wagnerian proposition can explain the growth of government in Saudi Arabia, which holds for both the oil and non-oil income cases. The findings also note that the existence of strong causality for all of Wagner’s law versions in the long run.

Keywords: Wagner’s Law; Co-integration; Error Correction Model (ECM); Augmented Dickey Fuller (ADF); Government Expenditure; Economic Growth; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: C32 H50 O53 (search for similar items in EconPapers)
Date: 2013-01-12
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-fdg and nep-pbe
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