Government revenue and government expenditure nexus: evidence from developing countries

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Title Government revenue and government expenditure nexus: evidence from developing countries
Author Narayan, Paresh Kumar; Narayan, Seema
Journal Name Applied Economics
Year Published 2006
Place of publication United Kingdom
Publisher Taylor & Francis Group
Abstract The relationship between government revenue and government expenditure has attracted a lot of interest given its policy relevance, particularly with respect to budget deficits. The goal of this paper is to investigate evidence for causality between government revenue and government expenditure within a multivariate framework by modelling them together with gross domestic product for 12 developing countries. Our application of the Toda and Yamamoto (1995) test for Granger causality reveals support for the tax-and-spend hypothesis for Mauritius, El Salvador, Haiti, Chile and Venezuela. For Haiti, there is evidence for the spend-andtax hypothesis, while for Peru, South Africa, Guatemala, Uruguay and Ecuador there is evidence of neutrality.
Peer Reviewed Yes
Published Yes
Alternative URI http://dx.doi.org/10.1080/00036840500369209
Volume 38
Issue Number 3
Page from 285
Page to 291
ISSN 0003-6846
Date Accessioned 2007-07-10
Date Available 2009-11-27T08:55:06Z
Language en_AU
Faculty Griffith Business School
Subject PRE2009-Applied Economics
URI http://hdl.handle.net/10072/26959
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1a

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