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An Examination of the Causal Relationship between Government Spending and Revenue: A Cointegration Analysis

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Author Info
Hondroyiannis, George
Papapetrou, Evangelia
Abstract

This paper tests the validity of the proposition that there is a causal relationship between government expenditure and government revenue for Greece over the period 1957-93. The empirical analysis employs tests of cointegration as pretests for Granger tests of causality. The empirical evidence suggests that there is a long-run relationship between government spending and government revenue and expenditures cause revenues. Copyright 1996 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Public Choice.

Volume (Year): 89 (1996)
Issue (Month): 3-4 (December)
Pages: 363-74
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Handle: RePEc:kap:pubcho:v:89:y:1996:i:3-4:p:363-74

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  1. Gabriella Legrenzi & Costas Milas, 2002. "Asymmetric and non-linear adjustment in the revenue-expenditure models," Economics and Finance Discussion Papers 02-03, Economics and Finance Section, School of Social Sciences, Brunel University. [Downloadable!]
    Other versions:
  2. Antti Moisio, 2000. "Spend and Tax or Tax and Spend? Panel Data Evidence from Finnish Municipalities during 1985 - 1999," VATT Discussion Papers 242, Government Institute for Economic Research (VATT). [Downloadable!]
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