On the Causal Relationship between Government Expenditure and Tax Revenue in Pakistan
This paper applies the technique of Granger Causality to determine the relationship between total government expenditures and total tax revenue using annual revised estimates. The analysis discovers a firm unidirectional effect from expenditure to revenue suggesting the preference of controlling the spending decisions to reduce the tax revenue-expenditure deficit.
Volume (Year): 9 (2004)
Issue (Month): 2 (Jul-Dec)
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- Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
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- Paul R. Blackley, 1986. "Causality Between Revenues and Expenditures and the Size of the Federal Budget," Public Finance Review, SAGE Publishing, vol. 14(2), pages 139-156, April.
- Michael Marlow & Neela Manage, 1987. "Expenditures and receipts: Testing for causality in state and local government finances," Public Choice, Springer, vol. 53(3), pages 243-255, January.
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