The Sustainability of Fiscal Policy and Deficit Budget Financing: Evidence from Selected Muslim Countries

Muhammad Zilal Hamzah () and Abd. Ghafar b. Ismail ()

Economic Journal of Emerging Markets, 2005, vol. 10, issue 3

Abstract: The sustainability of fiscal policy and how to finance the deficit budget has been receiving increasing attention from economists. The issue is paramount for the Muslim Countries and this is one of the motivations of the paper. In order to assess the sustainability of budget deficits in selected Muslim countries, a descriptive statistics for the stock of revenue, expenditure, tax over GDP and sustainability tests of government debt and deficit are performed for the Muslim countries for the 1971-2000 period. The cointegration model is also used to test the relationship between government expenditures, taxes, and seigniorage. The results show that the Muslim countries use taxes and seigniorage to finance their government expenditures. The empirical results also allow us to conclude that fiscal policy may be sustainable for most Muslim countries. JEL classification: E60; H62; H63;Keywords: deficit finance; inter-temporal budget constraint; fiscal policy; monetary policy; islamic countries.

Date: 2005
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journal.uii.ac.id/JEP/article/view/609/535 (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:uii:journl:v:10:y:2005:i:3:id:609

Access Statistics for this article

Economic Journal of Emerging Markets is currently edited by Ana Yuliani

More articles in Economic Journal of Emerging Markets from Universitas Islam Indonesia
Bibliographic data for series maintained by Ana Yuliani ().