Government spending drives economic growth in Indonesia, study confirms.
The study looked at how government spending affects economic growth in Indonesia. They used a special test called Toda-Yamamoto Causality Test. The results showed that government spending influences economic growth, supporting Wagner's Law. This means that when the government spends more money, the economy grows. The study also found that there is a connection between economic growth and government spending for economic purposes, following the ideas of Keynes. However, there is no direct link between other types of government spending and economic growth.