The Relationship between Federal Government Revenues and Expenditures in Pakistan
The paper investigates the relation between expenditures and revenues of the federal government of Pakistan for the period 1978-79 to 2008-09 using the Toda and Yamamoto (1995) methodology. The results show that there is a unidirectional causality from expenditures to revenues. The results indicate evidence of the spend-revenue hypothesis for Pakistan. The Potential investors may construe this government behaviour negatively, therefore, the investment decisions may take into account the possibilities of paying higher taxes in future.
Volume (Year): 49 (2010)
Issue (Month): 4 ()
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