Wagner's Law in the Brazilian Economy: a Disaggregated Analysis

Abstract

The paper empirically investigates the validity of Wagner’s law for the Brazilian economy, taking as reference the period 1948-93. One explicitly consider the nonstationarity of the series involved by means of a cointegration analysis. The study considers disaggregated categories of government expenditures, specifically consumption, investment and transfer payments. Only in the case of transfer payments one can find favorable evidence for Wagner's law.