The Nexus between Federal Revenue and Spending in Canada: A Time-Frequency Perspective

Yu Wang and Wei William X.
Additional contact information
Wei William X.: Faculty of Business and Economics, Algoma University, Sault Ste. Marie, Canada

Statistics, Politics and Policy, 2023, vol. 14, issue 1, 113-123

Abstract: The theoretical literature on the revenue-spending nexus suggests four possible relationships. They are tax-and-spend, negative tax-and-spend, spend-and-tax, and fiscal synchronization. Despite their homogenous research design, the empirical studies of Canada have provided mixed and inconclusive results. This study re-examines the topic from a time-frequency perspective. Specifically, it applies continuous wavelet analysis to the period 1867–2017 to delineate a complete picture of the revenue-spending nexus in Canada. Although results show the existence of all relationships suggested by theory at different time-frequency combinations, the spend-and-tax pattern is the most striking one and dominates the nexus in the long run. Theoretical, methodological, and policy-wise implications of this study are discussed at the end.

Keywords: revenue-spending nexus; federal government; Canada; continuous wavelet analysis; time series (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/spp-2022-0021 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:statpp:v:14:y:2023:i:1:p:113-123:n:7

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/spp/html

DOI: 10.1515/spp-2022-0021

Access Statistics for this article

Statistics, Politics and Policy is currently edited by Joel A. Middleton

More articles in Statistics, Politics and Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().