Abstract
This study examines the validity of symmetric and asymmetric Wagner's hypothesis for Nigeria using a dataset that spans the period from 1981 to 2016. Five versions of Wagner's hypothesis are specified and estimated with both the linear and nonlinear ARDL techniques. It is found that symmetric Wagner's hypothesis only holds in two of the versions (Peacock and Wiseman, 1961; Goffman, 1968). Only short-run asymmetric relationship exists between government expenditure and economic growth. However, cointegration exists between government expenditure and economic growth using linear and nonlinear ARDL. Granger-causality test supports Wagner's law while Toda-Yamamoto causality test produces mixed results. It is recommended that government may need to implement growth-promoting and sustainable expenditure policies so that a steady positive relationship can be established continuously between government expenditure and economic growth from the short to the long run.
Published Version
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