Government spending and economic growth : Time series evidence for Greece
Part of : Αρχείον οικονομικής ιστορίας ; Vol.XI, No.1-2, 2000, pages 167-177
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167-177
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This paper explores Wagner’s Law which emphasizes economic growth as the main determinant of public sector growth. Using annual data from the Greek economy over the time period 1950-1998, the paper provides evidence on both the short- and long-run dynamics of growth in real per capita income on public spending by resorting to recent developments in time series analysis. The empirical procedure produces results which are consistent with the validity of Wagner’s Law, indicating a long-run pattern of Granger causality running from economic growth to government spending.
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