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2019•SSRN Electronic JournalOpen access

Modeling the Determinants of Government Expenditure in Kenya

Muhia John Gachunga

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Abstract

Using a modified version of Wagner's Law, this paper sets to analyze the determinants of government expenditure in Kenya. Autoregressive Distributed Lag (ARDL) model was used to analyze time-series data for the period 1970 and 2017. The study finding reveals that GDP, population, trade openness, taxation, and inflation are essential determinants of the size of Kenya's government expenditure. The study recommends strengthening of fiscal and monetary policies to ensure stability in price level and exchange rate.

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What this paper is about

Using a modified version of Wagner's Law, this paper sets to analyze the determinants of government expenditure in Kenya. Autoregressive Distributed Lag (ARDL) model was used to analyze time-series data for the period 1970 and 2017. The study finding reveals that GDP, population, trade openness, taxation, and inflation are essential determinants of the size of Kenya's government expenditure. The study recommends strengthening of fiscal and monetary policies to ensure stability in price level and exchange rate.

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Available abstract

Using a modified version of Wagner's Law, this paper sets to analyze the determinants of government expenditure in Kenya. Autoregressive Distributed Lag (ARDL) model was used to analyze time-series data for the period 1970 and 2017. The study finding reveals that GDP, population, trade openness, taxation, and inflation are essential determinants of the size of Kenya's government expenditure. The study recommends strengthening of fiscal and monetary policies to ensure stability in price level and exchange rate.

Key concepts: Distributed lag, Government expenditure, Economics, Openness to experience, Inflation (cosmology), Exchange rate, Government (linguistics), Government spending

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