Cuadernos de Economía

Gasto De Gobierno Y Crecimiento Económico En México, Cambios De Régimen Y Causalidad Asimétrica

  • Alejandro Islas Camargo , Departamento de Estadística, ITAM Río Hondo No. 1, Col. Progreso Tizapan, 01080 Ciudad de México, México
  • Miguel A. González Favila , Instituto de Información estadística y Geográfica de Jalisco, Calzada de los pirules 71, Col. Cd. Granja C.P. 45010, Zapopan, Jalisco, México

Keywords:

Wagner law, Keynes’s hypothesis, threshold cointegration, economic growth, public expenditure..

Abstract

The long-term relationship between government spending and Mexico's economic growth is studied, taking into account any endogenous non-linearity that could arise to verify if Wagner's law and/or the Keynes hypothesis are met. Threshold cointegration techniques are used, which provide information on the asymmetry in the adjustment towards the long-term equilibrium. We consider that the main contribution of the work is that, according to the literature review, this is the first investigation that considers non-linearity in the case of Mexico. The results show evidence of the existence of a non-linear relationship between public spending and economic growth that validates Wagner's law; however, there are periods in which the causal relationship changes in favor of the Keynesian hypothesis, which is why It is possible that both hypotheses can alternate.