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Uncertainty and public expenditure: An analysis from a model of interactive variables
[Incerteza e gastos públicos: uma análise a partir de um modelo variáveis interativa]

Author

Listed:
  • Fabio Gama
  • Suzana Bastos

Abstract

This article analyzes the Brazilian fiscal policy between January/2003 and December/2018, seeking to fit it into one of four classic characteristics: tax-spend, spend-tax, fiscal synchronization and fiscal neutrality, in addition to analyzing the country´s revenues and expenditures, and asymmetries and causalities. By using Non-Linear Autoregressive Distributed Lag Models with cointegration, the results show cointegration between total revenues and expenses, also disaggregated into mandatory and discretionary expenses. Also, fiscal policy in Brazil is a “spend-tax” type, for the relationship between revenues, total and mandatory expenditures, and “tax-spend” for the relationship revenues-discretionary expenditures. Asymmetry is found in the relationship between total and mandatory expenditures, which grow together with GDP and revenue growth, but do not fall in recessions. Decreases in revenues lead to reductions in discretionary expenditures, which works by adjusting the short run budget, making le

Suggested Citation

  • Fabio Gama & Suzana Bastos, 2023. "Uncertainty and public expenditure: An analysis from a model of interactive variables [Incerteza e gastos públicos: uma análise a partir de um modelo variáveis interativa]," Estudios Economicos, Universidad Nacional del Sur, Departamento de Economia, vol. 40(80), pages 223-249, january-j.
    • Handle: RePEc:uns:esteco:v:40:y:2023:i:80:p:223-249
    DOI: https://doi.org/10.52292/j.estudecon.2023.2731
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    More about this item

    Keywords

    post-keynesian theory; bank uncertainty; public expenditure; panel data; postkeynesianism;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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