On the Causal Relationship between Government Expenditure and Tax Revenue in Pakistan
AbstractThis paper applies the technique of Granger Causality to determine the relationship between total government expenditures and total tax revenue using annual revised estimates. The analysis discovers a firm unidirectional effect from expenditure to revenue suggesting the preference of controlling the spending decisions to reduce the tax revenue-expenditure deficit.
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Bibliographic InfoArticle provided by Department of Economics, The Lahore School of Economics in its journal Lahore Journal of Economics.
Volume (Year): 9 (2004)
Issue (Month): 2 (Jul-Dec)
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Web page: http://www.lahoreschoolofeconomics.edu.pk/EconomicsJournal/LJEIntro.aspx
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- Paul R. Blackley, 1986. "Causality Between Revenues and Expenditures and the Size of the Federal Budget," Public Finance Review, , vol. 14(2), pages 139-156, April.
- Michael Marlow & Neela Manage, 1987. "Expenditures and receipts: Testing for causality in state and local government finances," Public Choice, Springer, vol. 53(3), pages 243-255, January.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
- Joulfaian, David & Mookerjee, Rajen, 1990. "The Intertemporal Relationship between State and Local Government Revenues and Expenditures: Evidence from OECD Countries," Public Finance = Finances publiques, , vol. 45(1), pages 109-17.
- Oluwole Owoye, 1995. "The causal relationship between taxes and expenditures in the G7 countries: cointegration and error-correction models," Applied Economics Letters, Taylor & Francis Journals, vol. 2(1), pages 19-22.
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