Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25548
Authors: 
Lamartina, Serena
Zaghini, Andrea
Year of Publication: 
2008
Series/Report no.: 
CFS Working Paper 2008/13
Abstract: 
The paper proposes a panel cointegration analysis of the joint development of government expenditures and economic growth in 23 OECD countries. The empirical evidence provides indication of a structural positive correlation between public spending and per-capita GDP which is consistent with the so-called Wagner’s law. A long-run elasticity larger than one suggests a more than proportional increase of government expenditures with respect to economic activity. In addition, according to the spirit of the law, we found that the correlation is usually higher in countries with lower per-capita GDP, suggesting that the catching-up period is characterized by a stronger development of government activities with respect to economies in a more advanced state of development.
Subjects: 
Fiscal Policy
Wagner's Law
Panel Cointegration
JEL: 
E62
H50
C23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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