AbstractThe objective of this study is to evaluate the impact of selected macroeconomic
variables on public expenditure in the UAE during the 1975-2020 period, based on the
Wagner (1883) law of increasing state activities. The study employs several estimation
techniques including the Gregory-Hansen cointegration approach, Autoregressive
Distributed Lag (ARDL) bounds testing technique, the Canonical Cointegrating
Regression (CCR), Fully Modified Ordinary Least Squares (FMOLS) estimators, the
Non-linear ARDL (NARDL) method, and the Toda-Yamamoto causality procedure.
The results of the cointegration tests demonstrate the presence of a long-term
relationship between public expenditure and the selected variables. Further, the results
of the different estimation techniques illustrate that oil price, tax burden, fiscal deficit,
outward flow of money and FDI, and interest rate influence the level of public
expenditure significantly both in the short-term and the long-term. Moreover, adoptin.....