The Viability of Fiscal Policy in South Korea, Taiwan, and Thailand
AbstractThe viability of stimulative fiscal policy has become a political issue in South Korea, Taiwan, and Thailand since the Asian financial crisis of 1997. This paper examines historical relationships between government spending, taxes, and output in these countries using cointegration and vector autoregression techniques with data starting in the 1950s. South Korea has had a policy of spend-and-tax, Taiwan tax-and-spend, while in Thailand there has been no apparent approach to fiscal policy. For the three countries, fiscal policy has had zero to negligible effects on output and is not recommended as a way to stimulate output.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper0209.
Length: 23 pages
Date of creation: 01 May 2002
Date of revision:
Contact details of provider:
Web page: http://aysps.gsu.edu/isp/index.html
fiscal policy; thailand; south korea;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-10-20 (All new papers)
- NEP-IFN-2003-10-20 (International Finance)
- NEP-SEA-2003-10-20 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rao, M. Govinda, 1998. "Accommodating public expenditure policies: the case of fast growing Asian economies," World Development, Elsevier, vol. 26(4), pages 673-694, April.
- Mundle, Sudipto, 1999. "Fiscal policy and growth: Some Asian lessons for Asia," Journal of Asian Economics, Elsevier, vol. 10(1), pages 15-36.
- Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
- J. Bradford DeLong, 1998. "The budget deficit," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue jan30.
- Hsiao, Cheng, 1979. "Causality tests in econometrics," Journal of Economic Dynamics and Control, Elsevier, vol. 1(4), pages 321-346, November.
- Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
- Hattori, Tamio & Sato, Yukihito, 1997. "A Comparative Study of Development Mechanisms in Korea and Taiwan: Introductory Analysis," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 35(4), pages 341-357, December.
- Baffes, John & Shah, Anwar, 1994. "Causality and comovement between taxes and expenditures: Historical evidence from Argentina, Brazil, and Mexico," Journal of Development Economics, Elsevier, vol. 44(2), pages 311-331, August.
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
- Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991.
"Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?,"
Cowles Foundation Discussion Papers
979, Cowles Foundation for Research in Economics, Yale University.
- Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
- Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
- Tom Doan, . "KPSS: RATS procedure to perform KPSS (Kwiatowski, Phillips, Schmidt, and Shin) stationarity test," Statistical Software Components RTS00100, Boston College Department of Economics.
- Buchanan, James M. & Wagner, Richard E., 1978. "Dialogues concerning fiscal religion," Journal of Monetary Economics, Elsevier, vol. 4(3), pages 627-636, August.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
- Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
- James G. MacKinnon, 1990.
"Critical Values for Cointegration Tests,"
1227, Queen's University, Department of Economics.
- Tom Doan, . "EGTEST: RATS procedure to compute Engle-Granger test for Cointegration," Statistical Software Components RTS00061, Boston College Department of Economics.
- James G. MacKinnon, 2010. "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Torgler, Benno, 2004.
"Tax morale in Asian countries,"
Journal of Asian Economics,
Elsevier, vol. 15(2), pages 237-266, April.
- Yu Hsing, 2006. "Analysis of Output Fluctuations in Taiwan: An Application of the IS–MP–AS Model," International Advances in Economic Research, Springer, vol. 12(2), pages 203-211, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Benson).
If references are entirely missing, you can add them using this form.