Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)

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Digging Into Economic Dynamics In South Sulawesi: Wagner’s Law To Keynes’ Hypothesis

Authors
Indraswati Tri Abdi Reviane1, *, Abdul Hamid Paddu1, Nur Dwiana Sari Saudi1, Fitriwati Djam’an1, Mirzalina Zaenal1
1Hasanuddin University, Makassar, Indonesia
*Corresponding author. Email: indraswati@fe.unhas.ac.id
Corresponding Author
Indraswati Tri Abdi Reviane
Available Online 30 July 2025.
DOI
10.2991/978-94-6463-758-8_106How to use a DOI?
Keywords
Government Spending; Economic Growth; Keynes Hypothesis; Wagner Theory
Abstract

The relationship between government expenditure and economic growth has been a subject of ongoing debate in economics, particularly in the context of regional development in Indonesia. This study aims to analyze the causal relationship between government spending and regional economic growth in South Sulawesi,Indonesia, taking into account two main views namely, Wagner’s Law and Keynes Hypothesis. Wagner’s Law states that increased government spending is a consequence of economic growth, while the Keynes Hypothesis argues that government spending can stimulate economic activity. The study employs panel data regression with Fixed Effect Model (FEM) and Granger causality test using annual data from 24 regencies/cities in South Sulawesi from 2010 to 2022. The FEM results indicate a significant positive relationship between government expenditure and economic growth. Moreover, the Granger causality test reveals bidirectional causality between government spending and economic growth. Thus, government spending in public policy should be done carefully, considering certain types of spending to achieve optimal economic growth. The findings suggest a complex, interdependent relationship between government expenditure and economic growth in South Sulawesi, highlighting the need for balanced and strategic fiscal policies.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
30 July 2025
ISBN
978-94-6463-758-8
ISSN
2352-5428
DOI
10.2991/978-94-6463-758-8_106How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Indraswati Tri Abdi Reviane
AU  - Abdul Hamid Paddu
AU  - Nur Dwiana Sari Saudi
AU  - Fitriwati Djam’an
AU  - Mirzalina Zaenal
PY  - 2025
DA  - 2025/07/30
TI  - Digging Into Economic Dynamics In South Sulawesi: Wagner’s Law To Keynes’ Hypothesis
BT  - Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024)
PB  - Atlantis Press
SP  - 1309
EP  - 1320
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-758-8_106
DO  - 10.2991/978-94-6463-758-8_106
ID  - Reviane2025
ER  -