Government Expenditure and National Income: Causality Tests for Twelve New Members of E.E

Chaido Dritsaki () and Melina Dritsaki ()
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Chaido Dritsaki: Technological Institute of Western Macedonia
Melina Dritsaki: Brunel University, West London

Romanian Economic Journal, 2010, vol. 13, issue 38, 67-89

Abstract: This study aims to determine the direction of causality between national income and government expenditures for twelve new members of E.E. namely Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Romania, Slovenia, and Slovakia. Support for the hypothesis that causality runs from government expenditures to national income has been found only in the case of Bulgaria and Cyprus. The results of Granger causality tests indicate that Wagner’s law is supported by the data of countries (Cyprus, Poland, and Romania) in our sample.

Keywords: Government Expenditure; National Income; Twelve New Members of E.E; Unit Root; Cointegration; Causality (search for similar items in EconPapers)
JEL-codes: C12 C22 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:13:y:2010:i:38:p:67-89

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