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Revenue-Expenditure Nexus for Southern States: Some Policy Oriented Econometric Observations

  • Kausik Chaudhuri

    ()

    (Madras School of Economics)

  • Bodhisattva Sengupta

    ()

    (Madras School of Economics)

The paper examines the temporal relationship between revenues and expenditures for the four southern states during 1980 to 2005. Using an error-correction model and Granger causality test, it finds that the tax-spend hypothesis is supported by the analsysis. The spend-tax hypothesis is valid for Karnataka; fiscal synchronization hypothesis is supported for Andhra Pradesh and Kerala, while the data for Tamil Nadu failed to show any causality.

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File URL: http://www.mse.ac.in/pub/working%20paper%2048.pdf
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Paper provided by Madras School of Economics,Chennai,India in its series Working Papers with number 2009-048.

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Length: 34 pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:mad:wpaper:2009-048
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  10. Henning Bohn, . "Budget Balance Through Revenue or Spending Adjustments ? Some Historical Evidence for the United States (Reprint 013)," Rodney L. White Center for Financial Research Working Papers 3-91, Wharton School Rodney L. White Center for Financial Research.
  11. Tanner, Evan & Liu, Peter, 1994. "Is the Budget Deficit "Too Large"?: Some Further Evidence," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 511-18, July.
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