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Untangling the web of causalities among four disaggregate government expenditures, government revenue and output in Taiwan

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  • Shyh-Wei Chen
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    Abstract

    Using Taiwan data, this empirical study delves into the causal links among four disaggregate real government expenditures, real government revenue and real output. The results substantiate that there is (i) neutrality between real government revenue and real government expenditure on economic development; (ii) unidirectional causality from real government revenue to real government expenditures on national defence, on general administration and on education, science and culture, confirming the tax-and-spend hypothesis; (iii) neutrality between output and the four disaggregate government expenditures; and (iv) unidirectional causality from real output to real government revenue. Several implications emerge from our empirical results.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Journal of Chinese Economic and Business Studies.

    Volume (Year): 6 (2008)
    Issue (Month): 1 ()
    Pages: 99-107

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    Handle: RePEc:taf:jocebs:v:6:y:2008:i:1:p:99-107

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    Related research

    Keywords: government expenditure; tax; Granger causality; VAR;

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    Cited by:
    1. HYE, Qazi Muhammad Adnan & M Anwar, Jalil, 2010. "Revenue and Expenditure Nexus: A Case Study of Romania," MPRA Paper 32132, University Library of Munich, Germany.

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