THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES
This paper presents the results for testing for causal relationship between economic growth and goverment spending for OIC countries covering the time series data 1970~2006. There are usually two propositions regarding the relation between economic growth and government spending: Wagner’s Law states...
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| Format: | Article |
| Language: | English |
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Muhammadiyah University Press
2015-06-01
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| Series: | Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan |
| Subjects: | |
| Online Access: | http://journals.ums.ac.id/index.php/JEP/article/view/322 |
| _version_ | 1828542015043796992 |
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| author | Heri Sudarsono |
| author_facet | Heri Sudarsono |
| author_sort | Heri Sudarsono |
| collection | DOAJ |
| description | This paper presents the results for testing for causal relationship between economic growth and goverment spending for OIC countries covering the time series data 1970~2006. There are usually two propositions regarding the relation between economic growth and government spending: Wagner’s Law states that as GDP grows, the public sector tends to grow; and the Keynesian framework postulates that public expenditure causes GDP to grow. The primary strength and originality of this paper is that we used aggregate data as well as disaggregate data for Granger causality test. By testing for causality between economic growth and government spending, we find that government spending does cause economic growth in Iran, Nigeria and Tunisia, which are compatible with Keynesian’s theory. However, the economic growth does cause the increase in goverment spending in Algeria, Burkina Faso, Benin, Indonesia, Libya Malaysia, Marocco, and Saudi, which are well-suited with Wagner’s law. |
| first_indexed | 2024-12-12T01:49:59Z |
| format | Article |
| id | doaj.art-0c49ecf9745c43c8847b2100540bea34 |
| institution | Directory Open Access Journal |
| issn | 1411-6081 2460-9331 |
| language | English |
| last_indexed | 2024-12-12T01:49:59Z |
| publishDate | 2015-06-01 |
| publisher | Muhammadiyah University Press |
| record_format | Article |
| series | Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan |
| spelling | doaj.art-0c49ecf9745c43c8847b2100540bea342022-12-22T00:42:31ZengMuhammadiyah University PressJurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan1411-60812460-93312015-06-01112149159291THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIESHeri Sudarsono0Fakultas Ekonomi Universitas Islam IndonesiaThis paper presents the results for testing for causal relationship between economic growth and goverment spending for OIC countries covering the time series data 1970~2006. There are usually two propositions regarding the relation between economic growth and government spending: Wagner’s Law states that as GDP grows, the public sector tends to grow; and the Keynesian framework postulates that public expenditure causes GDP to grow. The primary strength and originality of this paper is that we used aggregate data as well as disaggregate data for Granger causality test. By testing for causality between economic growth and government spending, we find that government spending does cause economic growth in Iran, Nigeria and Tunisia, which are compatible with Keynesian’s theory. However, the economic growth does cause the increase in goverment spending in Algeria, Burkina Faso, Benin, Indonesia, Libya Malaysia, Marocco, and Saudi, which are well-suited with Wagner’s law.http://journals.ums.ac.id/index.php/JEP/article/view/322granger test, government spending, Wagner’s law, Keynesian |
| spellingShingle | Heri Sudarsono THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan granger test, government spending, Wagner’s law, Keynesian |
| title | THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES |
| title_full | THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES |
| title_fullStr | THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES |
| title_full_unstemmed | THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES |
| title_short | THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND GOVERNMENT SPENDING: A CASE STUDY OF OIC COUNTRIES |
| title_sort | relationship between economic growth and government spending a case study of oic countries |
| topic | granger test, government spending, Wagner’s law, Keynesian |
| url | http://journals.ums.ac.id/index.php/JEP/article/view/322 |
| work_keys_str_mv | AT herisudarsono therelationshipbetweeneconomicgrowthandgovernmentspendingacasestudyofoiccountries AT herisudarsono relationshipbetweeneconomicgrowthandgovernmentspendingacasestudyofoiccountries |