The Spend-and-Tax or Tax-and-Spend: Further Evidence for the Brazilian Imperial Period

Fernando Zanella

Historical Social Research (Section 'Cliometrics'), 2008, vol. 33, issue 4, 255-263

Abstract: This article tests the flows of rents during the Brazilian Imperial period. To achieve this goal, a Vector of Error Correction Model (VECM) was employed to test long-run and short-run relationships between government revenues and expenditures. The VECM was applied for the entire imperial period with data available (1836-1889) and for the period after the Law Alves Branco (1844-1889), which more than doubled tariffs on imports. A trivariate causality test fails to show a casual relationship among the variables in any direction, regardless of the period tested. When the augmented granger causality test is employed for the entire period, results show a unidirectional causality from government expenditures to revenues, a spend-to-tax model, and a bi-causality relationship for the 1844-1889 period.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:afc:histor:v:33:y:2008:i:4:p:255-263

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