Acta Univ. Agric. Silvic. Mendelianae Brun. 2018, 66(5), 1227-1237 | DOI: 10.11118/actaun201866051227

Testing Wagner's Law and Keynesian Hypothesis in Selected Post-Soviet Countries

Jeyhun A. Abbasov1,2,3, Khatai Aliyev4,5,6
1 Central Bank of Azerbaijan Republic, AZ1014, Rashid Behbudov str. 90, Baku, Azerbaijan
2 Azerbaijan State University of Economics, International Graduate and Doctorate Center, AZ1001, Istiqlaliyyat str. 6, Baku, Azerbaijan
3 Baku Engineering University, Department of Mathematics and Informatics, AZ0101, Hasan Aliyev str. 120, Khirdalan city, Azerbaijan
4 Azerbaijan State University of Economics, UNEC Empirical Research Center, AZ1001, Istiqlaliyyat str. 6, Baku, Azerbaijan
5 Baku Engineering University, Department of World Economy, AZ0101, Hasan Aliyev str. 120, Khirdalan city, Azerbaijan
6 ASERC LLC, AZ1110, Mirali Gashgai str. 97/37, Baku, Azerbaijan

The aim of this research is to test Wagner's law and Keynesian hypothesis in 9 Post-Soviet countries - Estonia, Latvia, Lithuania, Uzbekistan, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, and Ukraine. For this purpose, long- and short-run causality between real per capita GDP and real per capita government expenditures are estimated by employing ARDL modelling approach. Estimation results support validity of Wagner's law for Latvia, Lithuania, Uzbekistan, Georgia, Kyrgyz Republic and Ukraine, and validity of Keynesian hypothesis for Estonia, Uzbekistan, Azerbaijan, Kyrgyz Republic, and Moldova in the long-run. Meanwhile, research findings indicate strong bidirectional short-run causality in all countries except Lithuania and Kyrgyz Republic in the short-run.

Keywords: Wagner's law, Keynesian Hypothesis, Post-Soviet countries, long-run association, short-run causality, ARDL modeling approach

Published: October 29, 2018  Show citation

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Abbasov, J.A., & Aliyev, K. (2018). Testing Wagner's Law and Keynesian Hypothesis in Selected Post-Soviet Countries. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 66(5), 1227-1237. doi: 10.11118/actaun201866051227
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