BALANCING THE BUDGET THROUGH REVENUE OR SPENDING ADJUSTMENTS? THE CASE OF GREECE

Panagiotis T. Konstantinou ()
Additional contact information
Panagiotis T. Konstantinou: Faculty of Economics, University of Rome III

Journal of Economic Development, 2004, vol. 29, issue 2, 81-105

Abstract: This paper examines the solvency of the Greek fiscal policy. Employing a cointegrated VAR as a benchmark, evidence of a long-run link between revenues and spending is presented, although intertemporal solvency is violated. Utilizing Granger-causality tests, a test for fiscal adjustment neutrality and Generalized Impulse Responses, this paper provides evidence in favor of the ¡®tax and spend¡¯ hypothesis for Greece. Additionally, the empirical evidence indicates that fiscal adjustment should take place through spending rather than revenue adjustment.

Keywords: Budget Balance; Government Revenue and Spending; Causality; Generalized Impulse Responses; Greece (search for similar items in EconPapers)
JEL-codes: C32 E60 H60 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.jed.or.kr/full-text/29-2/Panagiotis.pdf (application/pdf)

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:jed:journl:v:29:y:2004:i:2:p:81-105

Access Statistics for this article

Journal of Economic Development is currently edited by Sung Y. Park

More articles in Journal of Economic Development from Chung-Ang Unviersity, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sung Y. Park ().