Preferences help
enabled [disable] Abstract
Number of results
2017 | 81 | 2 | 221-234
Article title

Does consumption expenditure induce the ecomonic growth? An empirical evidence from Sri Lanka

Title variants
Languages of publication
Indeed, consumption expenditure is a very important element of increasing the economic growth, which was confirmed by enough empirical studies in different countries. But in Sri Lanka there is no evidence regarding the relationship between the consumption expenditure and economic growth. In order to test this relationship, this study used both multiple regression and Johansen and Juselius cointegration techniques by using time series data during the period of 1975 to 2014 of the following variables: exports, gross domestic product, consumption expenditure of households, and official development assistant. In this study, both techniques confirmed that the consumption expenditure positively impact on the economic growth and moves with the economic growth in the long - run period. Thus, this study strongly confirmed that the consumption expenditure in Sri Lanka induces the economic growth over the sample period. Therefore, this study recommends, if the policy makers should develop the policy to promote the consumption expenditure, the economic growth should be positively moved, so policy makers have to design consumption promotion policy.
Physical description
  • Sri Lanka Planning Service Officer, Ministry of Home Affairs, Sri Lanka
  • [1] Al-Fawwaz, T. M. (2015). The impact of government expenditures on economic growth in Jordan (1980-2013). International Business Research, 9(1), 99
  • [2] Udoka, C. O., & Anyingang, R. A. (2015). The Effect of Public Expenditure on the Growth and Development of Nigerian Economy (1980-2012). International Review of Management and Business Research, 4(3), 823
  • [3] Volkov, A. (1998). Long Run and Short Run Effects of Government Expenditures on Economic Growth: Are there Lessons for Ukraine? M. Sc. Department of Economics, EERC-NaUKMA University.
  • [4] Test, C. (2011). Causal Relationship between Consumption Expenditure and Economic Growth in Bangladesh. World, 1(2), 158-169
  • [5] Chioma, N. J. (2009). Causal relationship between gross domestic product and personal consumption expenditure of Nigeria. African Journal of Mathematics and Computer Science Research, 2(8), 179-183
  • [6] Chude, N. P., & Chude, D. I. (2013). Impact of government expenditure on economic growth in Nigeria. International journal of business and management review, 1(4), 64-71
  • [7] Dandan, M. M. (2011). Government expenditures and economic growth in Jordan. In International Conference on Economics and Finance Research, Singapore, Vol. 4, pp. 467-471
  • [8] Ebong, F., Ogwumike, F., Udongwo, U., & Ayodele, O. (2016). Impact of Government Expenditure on Economic Growth in Nigeria: A Disaggregated Analysis. Asian Journal of Economics and Empirical Research, 3(1), 113-121
  • [9] Garba, T. (2013). Public Expenditure and Economic Growth: An Application of Cointegration and Granger Causality Tests on Nigeria1. Journal of Economic and Social Research, 15(1), 1
  • [10] Kaur, K., & Mishra, O. N. (2017). Causal Relationship between Government Spending and Economic Growth in Rajasthan: A Toda-Yamamoto Approach. Arthshastra: Indian Journal of Economics & Research, 6(1), 10-22
  • [11] Lingxiao, W. A. N. G., Peculea, A. D., & Xu, H. (2016). The relationship between public expenditure and economic growth in Romania: Does it obey Wagner's or Keynes's Law? Theoretical & Applied Economics, 23(3).
  • [12] Muigai, M. N. (2016). Impact of Government Expenditure on Gross Domestic Product in Kenya.
Document Type
Publication order reference
YADDA identifier
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.