Title

Testing Wagner’s law versus the Keynesian hypothesis for GCC countries

Source of Publication

Applied Economics

Abstract

© 2020 Informa UK Limited, trading as Taylor & Francis Group. This paper examines the relationship between real GDP and government spending for the six Gulf Cooperation Council (GCC) countries. Linear Granger causality tests in the time and frequency domains provide moderate support for Wagner’s law in four countries and weak support for the Keynesian model in two countries. In contrast, asymmetric nonlinear causality tests in the frequency domain support Wagner’s law in five countries, while some form of the Keynesian hypothesis is valid in all six GCC countries. Our results illustrate the importance of using nonlinear, asymmetric models to examine causal relationships.

Document Type

Article

Publication Date

1-1-2020

DOI

10.1080/00036846.2020.1832196

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