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Fiscal Policy in Sweden: Effects of EMU Criteria Convergence

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  • Hatemi-J, Abdulnasser

    (Department of Economics, Lund University)

Abstract

This paper investigates the sustainability of fiscal policy in Sweden performed during the period 1963:01-1997:04. On the basis of Johansen's VAR and the augmented Granger causality tests, the results show that taxes and spending are causally related in the long-run and the homogeneity condition is supported empirically. The effect of EMU criteria convergence on fiscal policy is also investigated empirically. “Pantula principle” is applied for determining the form of deterministic trend component. Special attention is given to the lag-choosing process.

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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 1999:5.

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Length: 27 pages
Date of creation: 21 Sep 1999
Date of revision: Nov 1999
Publication status: Published in Economic Modelling, 2002, pages 121-136.
Handle: RePEc:hhs:lunewp:1999_005

Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Keywords: Spending; revenue; Granger causality; cointegration; Johansen's VAR; EMU;

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References

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  1. Abdulnasser Hatemi-J & Ghazi Shukur, 1999. "The causal nexus of government spending and revenue in Finland: a bootstrap approach," Applied Economics Letters, Taylor & Francis Journals, vol. 6(10), pages 641-644.
  2. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
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Cited by:
  1. Venus Khim-Sen Liew & Tuck Cheong Tang, 2009. "An Empirical Investigation of Purchasing Power Parity for a Transition Economy - Cambodia," Development Research Unit Working Paper Series 25-09, Monash University, Department of Economics.
  2. Amir Kia, 2005. "Sustainability of the Fiscal Process in Developing Countries- Egypt, Iran and Turkey: A Multicointegration Approach – revised version: Fiscal Sustainability in Emerging Countries: Evidence from Iran," Carleton Economic Papers 05-08, Carleton University, Department of Economics, revised Nov 2008.
  3. Baharumshah, Ahmad Zubaidi & Lau, Evan, 2007. "Regime changes and the sustainability of fiscal imbalance in East Asian countries," Economic Modelling, Elsevier, vol. 24(6), pages 878-894, November.
  4. Hjelm, Goran & Johansson, Martin W., 2005. "A Monte Carlo study on the pitfalls in determining deterministic components in cointegrating models," Journal of Macroeconomics, Elsevier, vol. 27(4), pages 691-703, December.
  5. Afonso, António & Agnello, Luca & Furceri, Davide & Sousa, Ricardo M., 2009. "Assessing long-term fiscal developments - a new approach," Working Paper Series 1032, European Central Bank.
  6. António Afonso, 2005. "Fiscal Sustainability: The Unpleasant European Case," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(1), pages 19-, March.
  7. Hjelm, Göran & Johansson, Martin W, 2002. "A Monte Carlo Study on the Pitfalls in Determining Deterministic Components in Cointegrating Models," Working Papers 2002:3, Lund University, Department of Economics.
  8. António Afonso & João Tovar Jalles, 2012. "Revisiting fiscal sustainability: panel cointegration and structural breaks in OECD countries," Working Papers Department of Economics 2012/29, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  9. António Afonso & João Tovar Jalles, 2011. "A Longer-run Perspective on Fiscal Sustainability," Working Papers Department of Economics 2011/17, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  10. Evan Lau & Ahmad Zubaidi Baharumshah, 2005. "Assessing The Mean Reversion Behavior Of Fiscal Policy: The Case Of Asian Countries," Macroeconomics 0504002, EconWPA.
  11. Samuel S. Jibao & Niek Schoeman & Ruthira Naraidoo, 2011. "Fiscal regime changes and the sustainability of fiscal imbalance in South Africa; a smooth transition error-correction approach," Working Papers 228, Economic Research Southern Africa.
  12. Bogdan Dima & Oana Lobont & Cristina Nicolescu, 2009. "The Fiscal Revenues And Public Expenditures: Is Their Evolution Sustenable? The Romanian Case," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 42.

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