The relationship between government spending and economic growth between Wagner and Keynes An applied study on non-oil Arab countries using the ARDL method

Abstract

This paper aims to identify the relationship between government spending and economic growth in some non-oil Arab states. It also examines the direction of this relationship, which is argued by two theoretical viewpoints, namely Wagner's Law and the Keynesian hypothesis. The study uses cross-panel data during the period 1970-2017 for 10 countries. It also employed the Autoregressive Distributed Lag (ARDL) and the cross-panel data models for estimating the study which was based on the findings of previous studies in this field. The study revealed that that there is a long-run relationship moving towards government spending to GDP, which supports the Keynesian theory and rejecting the non-applicability of Wagner's Law to the group of these countries.