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La relation entre les dépenses et les recettes publiques dans une économie régionale : le Québec, 1955-82

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  • Ahsan, Syed M.

    (Université Concordia)

  • Sahni, Balbir S.

    (Université Concordia)

Abstract

Does public expenditure growth stimulate income or is it the increase in provincial income which causes government spending to rise? Recent studies have shown that, at the national level, total public spending and national income are mutually dependent on each other in the causal sense. This finding has clear implications for economic policy and forecasting. In this paper the authors examine whether the above conclusion holds in a regional economy (such as a province in a Confederation) where both regional income and public expenditure are affected, directly and indirectly, by a host of agreements and programs negotiated with the federal government. This study shows that even in such a context, both the variables exhibit a feedback relationship. Thus, increases in public expenditure and provincial income in Quebec, in spite of exogenous forces, reinforce each other. Consequently, the authors suggest that public policy options be examined in terms of a more general framework embodying the joint-dependence. La croissance des dépenses publiques mène-t-elle à une augmentation des revenus ou est-ce la croissance des revenus provinciaux qui fait augmenter les dépenses publiques? De récentes études ont démontré qu’il y a une dépendance mutuelle entre les dépenses publiques et le PNB. Ces résultats ont des implications évidentes pour les politiques et les prévisions économiques. Les auteurs du présent article se demandent si ces résultats sont valables pour une économie régionale (tel qu’une province faisant partie d’une confédération) où les dépenses et les recettes publiques dépendent directement et indirectement d’un bon nombre d’accords et de programmes négociés avec le gouvernement fédéral. Cette étude démontre que même dans un contexte régional, il existe une relation avec feedback entre ces deux variables. Ainsi, la croissance des dépenses publiques et celle des revenus provinciaux au Québec se renforcent mutuellement en dépit des facteurs exogènes. Les auteurs suggèrent donc que le choix des politiques économiques se fasse dans un contexte plus global où l’on tiendrait compte de cette dépendance mutuelle.

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Bibliographic Info

Article provided by Société Canadienne de Science Economique in its journal L'Actualité économique.

Volume (Year): 63 (1987)
Issue (Month): 4 (décembre)
Pages: 295-310

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Handle: RePEc:ris:actuec:v:63:y:1987:i:4:p:295-310

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  1. Singh, Balvir & Sahni, Balbir S, 1984. "Causality between Public Expenditure and National Income," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 630-44, November.
  2. Sahni, Balbir S & Singh, Balvir, 1984. "On the Causal Directions between National Income and Government Expenditure in Canada," Public Finance = Finances publiques, , vol. 39(3), pages 359-93.
  3. Ram, Rati, 1986. "Causality between Income and Government Expenditure: A Broad International Perspective," Public Finance = Finances publiques, , vol. 41(3), pages 393-414.
  4. 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.
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