Conclusion The validity if Wagner law has been tested for G7Industrial countries in this pepperusing time- series data and econometrics modern techniques for the period of1970-2016.The pepper considered several specificationwhich commonly employed in the literature, for empirical investigating ofWagner law in last dictates. In the empirical section of this pepper the ADFand ERS-Piont Optimal unit root has been tested to examine the level ofstationarity for variables which indicate all variables are stationary in theirfirst differences.
The lag lengths have been selectedon the basis of AIC value which revealed in the (annx…….) for the further processof johansen maximum likelihood cointegration test, The finding of Johansenco-integration test for G7 industrial countiesshows that except Italy , there is a long run co-integration exist betweenGovernment consumption and Gross domestic product in the period of 1970-2016for Canada, Germany, France, United kingdom, United states and Japan which the normalizationof coefficients also supports the finding but by running VECM (Vector Error CorrectionModel), the finding of Error correction coefficient(table:….) and Wald Test doesnot support the long run and short run causality for Japans variables ,whereas it supports the long run and short runcausality for other countries. The Granger’s causality test revealeda bi-directional causality for variables of Canada, Germany and France and uni-directionalcausality for variables of UnitedKingdom and United State and no causality for variables of Italy, but in case of Japan as the finding shows;a positive long run relationship hasbeen founded between government consumptions and gross domestic products which supported the law but the causalitytests doesn’t support it.Finally thefinding of the pepper support the validity of Wagner low for Finally thepepper found a strong support of Wagner law for Canada, Germany, France, UnitedKingdom and United States, the finding also shows that the Wagner law does nothold for Italy and Japan in the period of 1970-2016.