Government expenditure and national income is the major and main important in economics growth These often used to know the fluctuation in the economy growth based on the government expenditure and also national income. However, some researcher found that the relationship of government expenditure and national income are inconsistently. (Chaido Dritsaki1,Melina Dritsaki2).some researcher has been done the research towards the relationship of government expenditure and national income.

Government expenditure can be classified as the expenditure was made based on the country by the federal, the local government and also by the states. For example, the constructions of a new building such as hospital and school. Also a payment of the salaries to the public servants in the country.

National income is the net value of commodities and services produced by the nation’s economic systems. It sometimes called net national product. (Simon smith Kuznets).

To increase the generate the standard of living among the people in the country and to ensure the stability of the economics of the country such as Brunei, Japan, Vietnam, Taiwan and china, the country must have a strong economic growth in order to boost the performance of the country towards the standard of living of the people. Sometimes, economics growth may fall or decrease and sometimes its also may arising or increasing due to the factors that contribute and lead to the economic growth. To achieve the economics growth of the country, it takes the national income which is real gross domestic product (RGDP) and real gross national product (RDNP). According to Hussin Abdullah and salamah Maamar, they claimed that, the components or the term of the national income remain fixed price whereby basic price of the goods in the year.they also claimed that government expenditure were play the importance factors to restore and restructure the economy in country.

In this study, we aim to used the times series data to examine the relationship of government expenditure and national income and to know the validity and effectiveness of the Wagner’s law applied in Five Asian country which is Japan, Brunei, Taiwan, Vietnam and china.

1.2 Problem Statement

In this research, there are several and certain problem statement or problem definition were arise. According to Uma Sakaran (2000), problem statement and problem definition can be classified as a clear, precise and succient statement of the question and any related issue that want to investigate with the objective and goal to solve the problem and finding the answer.

Government expenditure and national income was play the main important to develop the country development and to boost the economics growth. Wagner’s law stated that, national product give a significant and positive impact to economics growth also has a relationship between government development expenditure.

Home

Wherever, many researcher has conduct the research, examine and identify the relationship of the government expenditure and national income, the result or the finding is inconsistenly (chaiko Dritsaki, Melina Dritsaki) 2010. They found that, the government expenditure and national income are not consistency as stated of Wagner’s law where, its has a relationship between government expenditure and national income.

1.3 Objective of the study

There are several objectives that classified in this study. The objective include or consist;-

To know the validity of Wagner’s Law towards relationship between government expenditure and national income.

To examine the relationship of government expenditure and national income

1.4 Scope and limitation of study

1.4.1 Data availability and accessibility

This study will cover and carried out a limited no. of observation due to the lack of the data availability and accessibility. Due to the lack of data that researcher needed, the result will not give the accurate result because of the small number of observation.

1.4.2 Time Constrain

To complete this research, only two (2) months are given to complete the research. Thus, the researcher only can observe a 30 years only due to the other responsibility.

1.4.3 Lack of literature review and related issued

On this study that be conducted, it were lack of the literature review and any related issues that can be support to answer the finding or the problem. Its difficult to find the Literature review of this study.

1.5 Significance of the problem

1.5.1 to the researcher

Researcher may gain the experience and also can gain the knowledge. Its may give the advantages to the researcher where researcher may apply the econometric model into this research.

1.5.2 to other researcher

Giving the beneficial where give the positive impact to other researcher. They may used this research as a reference and guideline regarding their topic that want to study and conduct.

1.5.3 to public

Public may gain the information and know about the existence of the Wagner’s Law. They also may get the knowledge and information towards this research.

2.0 LITERATURE REVIEW AND CONCEPTIAL FRAMEWORK

2.1 Introduction

This part will discuss the past research that has been done by other researcher to prove the relationship government expenditure and national income based on Wagner’s Law. Government expenditure and national income play the major important in macroeconomics. These often used to know the fluctuation in the economy growth based on the government expenditure and also national income. However, some researcher found that the relationship of government expenditure and national income are inconsistently. (Chaido Dritsaki1,Melina Dritsaki2).some researcher has been done the research towards the relationship of government expenditure and national income.