The use of government expenditure in the market has been utilized throughout time to lead to positive impacts on the market in economics. Wagner’s Law proposed that there is a long-run tendency for the public sector to grow relative to national income. Multiple empirical studies since Wagner’s theory was publicised have come out in support of Wagner’s ‘Law of increasing state activity’. This study utilizes six versions of Wagner’s Law to test if Wagner’s Law holds true for the case of Japan between the time period 1970 – 2020. The econometric results show that three of the six versions of Wagner’s Law used in this support Wagner’s theory that there is a long-run tendency for the public sector to grow relative to national income. The results also showed that three out of the six versions of Wagner’s Law utilized in this study concluded that Wagner’s Law did not hold in the case of Japan.
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