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An Examination of the Causal Relationship between Government Spending and Revenue: A Cointegration Analysis

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  • Hondroyiannis, George
  • Papapetrou, Evangelia

Abstract

This paper tests the validity of the proposition that there is a causal relationship between government expenditure and government revenue for Greece over the period 1957-93. The empirical analysis employs tests of cointegration as pretests for Granger tests of causality. The empirical evidence suggests that there is a long-run relationship between government spending and government revenue and expenditures cause revenues. Copyright 1996 by Kluwer Academic Publishers

Suggested Citation

  • Hondroyiannis, George & Papapetrou, Evangelia, 1996. "An Examination of the Causal Relationship between Government Spending and Revenue: A Cointegration Analysis," Public Choice, Springer, vol. 89(3-4), pages 363-374, December.
    • Handle: RePEc:kap:pubcho:v:89:y:1996:i:3-4:p:363-74
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