A Multicountry Perspective on Causality between Government Revenue and Government Expenditure
Using a well-recommended procedure and recent annual data for twenty-two countries, Ganger-causality between government revenue and government expenditure, in both current and constant price terms, is assessed for each country. Evidence of statistically-significant causal flow is lacking in at least 50 percent of the cases, and the results indicate enormous cross-country diversity; one can find almost any causal order by focusing on limited data sets. Despite some differences, the causal patterns are broadly similar for developed and underdeveloped countries, in current and constant price series, and for several different lag specifications.
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Volume (Year): 43 (1988)
Issue (Month): 2 ()
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