Keynes versus Wagner: public expenditure and national income for three African countries

Authors: Ansari M. I.; Gordon D. V.; Akuamoah C.

Source: Applied Economics, Volume 29, Number 4, 1 April 1997 , pp. 543-550(8)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

The public expenditure/income hypothesis has long been debated in economics. Following Keynes, public expenditure is seen as an exogenous factor to be used as a policy instrument to influence growth. On the other hand, Wagner argues that expenditure is an endogenous factor or an outcome, not a cause, of growth in national income. The purpose of this paper is to apply both the Granger and Holmes-Hutton statistical procedures to test the income-expenditure hypothesis for three African countries-Ghana, Kenya and South Africa. We find that the hypothesis of public expenditure causing national income is not supported by the data for these African countries.

Language: English

Document Type: Research article

Publication date: 1997-04-01

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