Abstract

GARCIA, Manuel Jaén. TWO EMPIRICAL CONTRASTS OF THE WAGNER’S LAW: SPAIN 1850-2016. Semest. Econ. [online]. 2020, vol.23, n.54, pp.145-179.  Epub July 30, 2020. ISSN 0120-6346.  https://doi.org/10.22395/seec.v23n54a8.

This work performs a double empirical contrast of the well known Wagner's Law of increasing state spending. In one hand a widely known contrast is considered by using unitarian and cointegrated instruments. In the other hand, the lesser-known wavelet contrast is used. The time frame considered, 1850-2016, is the longest of those employed until today by any other contrast of this law with Spanish data. The results point towards that the Wagner's Law cannot be rejected for the totality of the samples, including the structural ruptures within the co-integration equations and the ECM, whereas in the second the provenance of the spent regarding the GDP and vice versa does not allow to affirm the compliance with the law except on very short time frames; because of that, and with a general character, this law can be rejected for the complete timeframe.

JEL CODE: H11, H50, E62.

CONTENTS: Introduction; 1. Wagner’s Law; 2. A brief semblance on state spending in Spain in the 1850-2010 time frame; 3. Empirical contrast of the law using unit roots and cointegration; 4. Wavelet methodology; 5. Conclusions; Bibliography.

Keywords : State spending; gross domestic product; unit-roots; cointegration; wavelet methodology.

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