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.
Attached Files
(Some files may be inaccessible until you login with your Deakin Research Online credentials)
Name
Description
MIMEType
Size
Downloads
Title
The government revenue and government expenditure nexus: empirical evidence from nine Asian countries
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.