The causal relation between government revenue and spending: Evidence from Egypt and Jordan

Bassam AbuAl-Foul () and Hamid Baghestani ()
Authors registered in the RePEc Author Service: Bassam Abu Al-Foul

Journal of Economics and Finance, 2004, vol. 28, issue 2, 260-269

Abstract: In investigating the causal relation between government revenue and spending, our empirical results support the tax-and-spend hypothesis for Egypt and the fiscal synchronization hypothesis for Jordan. Breaking away from these historical trends is essential for both countries to eliminate the budget deficit and therefore ensure the availability of domestic saving for private investment. To cope with unemployment and poverty, continuing privatization is recommended for both countries to improve productivity and efficiency in the domestic economy. Privatization should lead to higher domestic saving and investment and at the same time eliminate the budget deficit by enhancing revenue and curbing spending. (JEL H62, H63) Copyright Springer 2004

Date: 2004
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DOI: 10.1007/BF02761616

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