My research is about the relation of public spending on economic growth so I am using proxy data like economic growth rate and public spending as share of GDP, but initial dynamic regressions (ARDL) show some heteroskedacity problems so I am wondering if it would be necesary to seasonaly adjust the public spending and other variables as share of gdp before using them. thanks in advance
Since government activities such as spending and public revenue or debt generally do not show any seasonal fluctuations, a seasonal adjustment would make no sense. The statistical problems must therefore have other causes. If the time series are sufficiently long, these also fade into the background. Then valid empirical results can be achieved. See for example the following links:
https://www.researchgate.net/publication/273966820_Taxes_Tax_Systems_and_Economic_Growth
https://www.researchgate.net/publication/273973721_Impact_of_the_Tax_System-The_Case_of_the_Federal_Republic_of_Germany
The rate of economic growth is measured in gross domestic product, so the growth rate is the rate of gross domestic product, and the proportion of spending to GDP is part of the gross domestic product.
Conclusion
The economic growth rate is the total, and the spending percentage of the gross domestic product is a part of the economic growth rate. How can this process be measured. Perhaps the problem is in choosing the data for the whole of the part. The solution is to measure the growth rate using the GDP data and the use of spending in isolation from the output
My greetings Amilcar Contreras
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