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Government Revenues And Expenditures In Guinea-Bissau: Causality And Cointegration

Author

Listed:
  • Francisco G. Carneiro

    () (The World Bank)

  • Joao R. Faria

    (University of Texas at Dallas)

  • Boubacar S. Barry

    (The World Bank)

Abstract

The paper establishes empirically the temporal causality and long run relationship between government expenditures and government revenues for the case of Guinea-Bissau - a low income country under stress (LICUS) in Africa. A macroeconomic model is developed to lay out the hypothesis of a spend-tax behavior in the country¡¯s public finances management system. Empirical validation is carried out by means of a traditional Granger-causality test and the estimation of an error correction model between expenditures and revenues.

Suggested Citation

  • Francisco G. Carneiro & Joao R. Faria & Boubacar S. Barry, 2005. "Government Revenues And Expenditures In Guinea-Bissau: Causality And Cointegration," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 107-117, June.
  • Handle: RePEc:jed:journl:v:30:y:2005:i:1:p:107-117
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    File URL: http://www.jed.or.kr/full-text/30-1/08_J680.PDF
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    References listed on IDEAS

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    1. 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.
    2. Phillips, P.C.B., 1986. "Understanding spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 33(3), pages 311-340, December.
    3. K. Dhanasekaran, 2001. "Government Tax Revenue, Expenditure and Causality: the Experience of India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 36(2), pages 359-379, July.
    4. David E. Bloom & David Canning & Jaypee Sevilla, 2001. "The Effect of Health on Economic Growth: Theory and Evidence," NBER Working Papers 8587, National Bureau of Economic Research, Inc.
    5. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Andrew Phiri, 2018. "How sustainable are fiscal budgets in the Kingdom of Swaziland?," Working Papers 1810, Department of Economics, Nelson Mandela University, revised Mar 2018.
    2. Phiri, Andrew, 2016. "Asymmetries in the revenue-expenditure nexus: New evidence from South Africa," MPRA Paper 75224, University Library of Munich, Germany.
    3. Afia Malik, 2013. "Private Investment And Fiscal Policy In Pakistan," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(1), pages 83-109, March.
    4. Takumah, Wisdom, 2014. "The Dynamic Causal Relationship between Government Revenue and Government Expenditure Nexus in Ghana," MPRA Paper 58579, University Library of Munich, Germany.
    5. Richard Doh-Nani & Dadson Awunyo-Vitor, 2012. "The Causal Link between Government Expenditure and Government Revenue in Ghana," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(2), pages 382-388, June.

    More about this item

    Keywords

    Public Finances; Causality Tests; Cointegration Analysis;

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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