Wagner's Law and Keynesian Hypothesis Dilemma in Turkey: The Period of 1960-2019

Abstract

The aim of the study is to determine the relationships between public expenditure and both gross national product and economic growth in Turkey. When the literature is evaluated, it is seen that there are two common theories in this field. One of these is the Wagner's law and accordingly it is claimed that public expenditures will increase as a result of economic growth. The other is the Keynesian hypothesis and it is argued that economic growth will depend on the increase in public expenditures. Analyzes made in this area obtain only one result for the period. However, there is more than one situation in the period. Therefore, traditional analyzes remain incomplete in this area. In order to eliminate this deficiency, the whole period was analyzed with Wavelet Coherence analysis in the study.