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Volume : II, Issue : VII, August - 2012

Government Expenditure And Economic Growth: Testing Of Wagner's Hypothesis

SHARAD N. BANSAL and SHRADHA H. BUDHEDEO

Published By : Laxmi Book Publication

Abstract :

The paper examines the relationship between public expenditure and economic growth in the Indian states by empirically testing the Wagner's Law. The study uses alternative interpretations of the Wagner's Hypothesis to test the hypothesis of increasing state activity for twenty nine Indian states using cross-sectional data and regression analysis. The empirical evidence reported in the paper does not support Wagner's hypothesis of increasing state activities. The Wagner's hypothesis is rejected meaning thereby that government expenditure is increasing at a slower rate than the economic growth. Hence, there is decreasing role of government in Indian states

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Cite This Article :

SHARAD N. BANSAL and SHRADHA H. BUDHEDEO, (2012). Government Expenditure And Economic Growth: Testing Of Wagner's Hypothesis. Indian Streams Research Journal, Vol. II, Issue. VII, http://oldisrj.lbp.world/UploadedData/1273.pdf

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