Bootstrap Panel Granger-Causality Between Government Spending and Revenue

Antonio Afonso and Christophe Rault ()

No 2008/39, Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

Abstract: Using bootstrap panel analysis, allowing for cross-country correlation, without the need of pre-testing for unit roots, we study the causality between government revenue and spending for the EU in the period 1960-2006. Spend-and-tax causality is found for Italy, France, Spain, Greece, and Portugal, while tax-and-spend evidence is present for Germany, Belgium, Austria Finland and the UK, and for several EU New Member States.

Keywords: panel causality; fiscal policy; EU. (search for similar items in EconPapers)
JEL-codes: C23 E62 H62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pub
Date: 2008-07

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Persistent link: http://EconPapers.repec.org/RePEc:ise:isegwp:wp392008

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