PRIVATE AND GOVERNMENT CONSUMPTION IN TRANSITIONAL ECONOMIES: A PANEL DATA ANALYSIS
Nicholas Apergis (),
Katerina Lyroudi () and
Athanasios Sfetsos ()
Additional contact information Katerina Lyroudi: Department of Accounting and Finance, University of Macedonia
Athanasios Sfetsos: Research Center Demokritos
This paper investigates the presence of the relationship between private and government consumption through panel data techniques. Using a panel from different transitional countries, from 1990 to 2003, it applies the panel cointegration and causality methodologies. The study finds statistical evidence for a long run relationship between the variables under study. The empirical findings do not support the Ricardian Equivalence, since government consumption affects private consumption negatively in both methodological approaches.