The Relationship between Economic Growth and

Government Spending in Gauteng: An Autoregressive

Distributed Lag Approach

Fiscal Policy decisions regarding government spending have an influence on economic activity. Wagner’s Law asserts that government expenditure rises as the economy expands. The Keynesian multiplier posits that an initial change in government spending or investment leads to an even larger increase in regional output. Government spending has been seen as a critical factor in moderating business cycle peaks and troughs. Hence this study assesses the relationship between government spending and regional gross value added in Gauteng. The study uses quarterly time series data from 2014 to 2024 and adopts the Autoregressive Distributed Lag (ARDL) bounds testing approach to

cointegration.