An Examination of the Causal Relationship between Government Spending and Revenue: A Cointegration Analysis

George Hondroyiannis and Evangelia Papapetrou

Public Choice, 1996, vol. 89, issue 3-4, 363-74

Abstract: This paper tests the validity of the proposition that there is a causal relationship between government expenditure and government revenue for Greece over the period 1957-93. The empirical analysis employs tests of cointegration as pretests for Granger tests of causality. The empirical evidence suggests that there is a long-run relationship between government spending and government revenue and expenditures cause revenues. Copyright 1996 by Kluwer Academic Publishers

Date: 1996
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