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The Wagner’s Law: Time Series Evidence for Turkey, 1960-2006 The Wagner’s Law: Time Series Evidence for Turkey, 1960-2006 = Wagner Yasası: Türkiye Örneği, 1960-2006

Author(s): Özlem TAŞSEVEN

Journal: Dogus University Journal
ISSN 1302-6739

Volume: 12;
Issue: 2;
Start page: 304;
Date: 2011;
Original page

Keywords: Wagner’s law | Government Expenditures | Co-integration | Causality | Turkish Economy | Wagner Yasası | Kamu Harcamaları | Ko-integrasyon | Nedensellik | Türkiye Ekonomisi

In this paper the Wagner’s Law for Turkey for the period 1960-2006 is analyzed. Wagner’s law investigates whether there is a long run relationship between government expenditures and the gross national product of a country. The paper uses modern time-series econometric techniques to test the validity of law’s proposition. Cointegration analysis is used to test the validity of the Wagner’s law. Our results suggest that Wagner’s law is validated for two formulations using the definition given by Florio & Colutti (2005) according to the elasticity measures for the period under consideration. In this paper the Toda-Yamamoto tests of Granger causality, short and long run properties of the model within an error correction model are examined. Estimated error correction models indicate that the Granger-causality between government expenditures and gross domestic product is bi-directional in the long run.

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