Exploring Wagner’s Law in India: An Empirical Study of Economic Growth and Public Expenditure
Jasneet Kaur Wadhwa1, Srividya Subramaniam2
1Dr. Jasneet Kaur Wadhwa, Associate Professor, Department of Economics, SGTB Khalsa College, University of Delhi, New Delhi India.
2Dr. Srividya Subramaniam, Associate Professor, Department of Economics, SGTB Khalsa College, University of Delhi, New Delhi India.
Manuscript received on 30 April 2024 | Revised Manuscript received on 14 May 2024 | Manuscript Accepted on 15 May 2024 | Manuscript published on 30 May 2024 | PP: 39-46 | Volume-4 Issue-1, May 2024 | Retrieval Number: 100.1/ijef.A257404010524 | DOI: 10.54105/ijef.A2574.04010524
Open Access | Editorial and Publishing Policies | Cite | Zenodo | OJS | Indexing and Abstracting
© The Authors. Published by Lattice Science Publication (LSP). This is an open-access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: In this research paper, we test the connections between public spending and economic growth in India by employing annual data from 1981-82 till 2019-20. We examine if there is a long-run relation between public spending and economic growth and then we try to understand the direction of causality between them by using six versions of Wagner’s law along with an augmented version. The paper employs tests of stationarity, cointegration, granger causality and the vector error correction model for the analysis in all the versions. Results from these tests show that only some versions give support to validateWagners’ law in India over the sample period studied.
Keywords: Economic Growth; Public Spending; Cointegration; Granger Causality; India.
Scope of the Article: Public Sector Accounting