The Government Revenue–Expenditure Nexus in Southeast Europe: A Bootstrap Panel Granger-Causality Approach

Biljana Tashevska, Borce Trenovski and Marija Trpkova - Nestorovska

Eastern European Economics, 2020, vol. 58, issue 4, 309-326

Abstract: This article presents one of the first attempts to explore the relationship between government revenues and government expenditures in six Southeast European countries for the period 1999–2015, employing a bootstrap panel Granger-causality approach, which provides insight into the nature and direction of their relationship in each country. The empirical results indicate a unidirectional relationship from government revenues to government expenditures in five countries (Albania, Bulgaria, Croatia, Serbia, and Slovenia), confirming the revenue-expenditure or tax-spend hypothesis. The findings offer support for the fiscal synchronization hypothesis only in Macedonia, where bidirectional causality between government revenues and government expenditures was found.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:mes:eaeuec:v:58:y:2020:i:4:p:309-326

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DOI: 10.1080/00128775.2020.1724156

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