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The relationship between trade openness and public expenditure. The spanish case, 1960-2000

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  • Mª Dolores Gadea Rivas

    ()
    (Department of Applied Economics. School of Economics. University of Zaragoza)

  • Marcela Sabaté Sort

    ()
    (Department of Applied Economics. School of Economics. University of Zaragoza)

  • Estela Sáenz Rodríguez

    ()
    (Department of Applied Economics. School of Economics. University of Zaragoza)

Abstract

The aim of this paper is to empirically determine whether there is a relation between trade openness and public expenditure in Spain using annual long-run data from 1960 to 2000, a period that has witnessed an accelerated process both of openness to the international markets of goods and services and of public sector growth. Results, based on the cointegration of Johansen, reveal a long-term relationship between public expenditure and both trade openness and several protection indicators. We complete our investigation with a robustness study and a stability analysis to check whether the aforementioned relationship is affected or not by structural changes.

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Bibliographic Info

Paper provided by Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza in its series Documentos de Trabajo with number dt2009-06.

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Date of creation: Jun 2009
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Handle: RePEc:zar:wpaper:dt2009-06

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Keywords: trade openness; public expenditure; cointegration;

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