Wagner’s Law vs. Keynesian Hypothesis: Dynamic Impacts
Sustainability
; 14(16):10431, 2022.
Article
in English
| ProQuest Central | ID: covidwho-2024165
ABSTRACT
This study analyzes the dynamics between public expenditure and economic growth in Peru for 1980Q1–2021Q4. We used quarterly time series of real GDP, public consumption expenditure, public expenditure, and the share of public expenditure to output. The variables were transformed into natural logarithms, wherein only the logarithm of public expenditure to output ratio is stationary and the others are non-stationary I1. The study of stationary time series assesses whether Wagner’s law, the Keynesian hypothesis, the feedback hypothesis, or the neutrality hypothesis is valid for the Peruvian case according to Granger causality. We found cointegration between real GDP and public expenditure, and public consumption expenditure and real GDP. Estimating error correction and autoregressive distributed lag models, we concluded that Wagner’s law and the Keynesian hypothesis are valid in the Peruvian case, expressed as dynamic processes that allow us to obtain short-run and long-run impacts, permitting the mutual sustainability of economic growth and public expenditure.
Environmental Studies; public expenditure; economic growth; Wagner’s law; Keynesian hypothesis; Granger causality; cointegration; error correction model; autoregressive distributed lag model; Logarithms; Macroeconomics; Error correction; Neutrality; Fiscal policy; Causality; Sustainability; Dynamic tests; Medical supplies; Consumption; Public sector; Wages & salaries; COVID-19; Public services; Hypotheses; Capital expenditures; Economic analysis; Gross Domestic Product--GDP; Autoregressive models; Coronaviruses; Government spending; Economic development; Time series; Government; Peru
Full text:
Available
Collection:
Databases of international organizations
Database:
ProQuest Central
Type of study:
Experimental Studies
Language:
English
Journal:
Sustainability
Year:
2022
Document Type:
Article
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