Testing the applicability of Wagner's Law in China based on reconstruction of government expenditure indicators

• 来源期刊: 中国财政与经济研究（英文版）
• 关键词: government expenditure Wagner's Law applicability indicator reconstruction
• 年，卷（期）: 2015,（1）
• 页码范围: 87-100
• 页数: 14页
• 语种: 英文

摘要

Wagner's Law can describe the relationship between government expenditures and economic growth.However,its applicability in China remains controversial.In this paper,we first reconstruct two government expenditure indicators based on the disadvantages of current fiscal expenditure indicators to explain the government scale and then use these indicators to test the applicability of Wagner's Law in China.Results showed that data from the indicators could support Wagner's Law well when considering numerical increases in expenditures from 1989 to 2012.However,in terms of relative size of government expenditures proportional increases with the model,the test results of current expenditure indicator do not support the applicability of Wagner's Law in China.At the same time test results with the two kinds of reconstruction of indicators both can support it well.Overall,the empirical results indicate that new expenditure indicators are more appropriate in testing the applicability of Wagner's Law in China.