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The government revenue and government expenditure nexus: empirical evidence from nine Asian countries

Narayan, Paresh Kumar 2005, The government revenue and government expenditure nexus: empirical evidence from nine Asian countries, Journal Of Asian economics, vol. 15, no. 6, pp. 1203-1216.

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Title The government revenue and government expenditure nexus: empirical evidence from nine Asian countries
Author(s) Narayan, Paresh Kumar
Journal name Journal Of Asian economics
Volume number 15
Issue number 6
Start page 1203
End page 1216
Publisher Elsevier
Place of publication Amsterdam, The Netherlands
Publication date 2005-01
ISSN 1049-0078
1873-7927
Summary The nexus between government revenue and government expenditure has been an important topic in public economics. In this paper, we investigate evidence for cointegration and causality between government revenue and government expenditure for nine Asian countries. We use the recently developed bounds testing approach to cointegration and the conventional F-test to examine Granger causality. Our empirical results suggest that for three out of the nine countries government revenue and government expenditure are cointegrated. Our results on the direction of causation are mixed: (a) for Indonesia, Singapore, Sri Lanka in the short-run and for Nepal in both the short- and long-run we find support for the tax-and-spend hypothesis; (b) Indonesia and Sri Lanka are in conformity with the spend-and-tax hypothesis in the long-run; and (c) for other countries there is evidence of neutrality.
Field of Research 140215 Public Economics- Taxation and Revenue
HERDC Research category C1.1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024657

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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