Public expenditure and revenue in Italy, 1862-1993

Cosimo Magazzino

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines the long-run equilibrium relationship between government expenditure and revenue in Italy from 1862 to 1993, using cointegration techniques and the direction of causality relationship in the long and short runs between the variables through integrating the Error Correction Model (ECM) into the traditional Granger causality test. A Granger non-causality test (due to Toda and Yamamoto) is also performed. Unit root tests have been applied in order to investigate the stationarity properties of the series. Moreover, three more homogeneous sub-period (1862-1913; 1914-1946; 1947-1993) have been analyzed. The nexus between public expenditure and revenue has been discussed also by Impulse Response Functions (IRFs) and Forecast Error Variance Decompositions (FEVDs). Empirical findings show how, for each sub-period, the policy adopted reflect the prevailing paradigm of public finance (neutral or orthodox finance, Keynesian finance and discretionary or compensatory finance, respectively).

Keywords: Government expenditure; government revenue; stationarity; cointegration; causality; spend and tax; tax and spend; Italy. (search for similar items in EconPapers)
JEL-codes: B22 C22 C50 E62 H20 (search for similar items in EconPapers)
Date: 2010-12-08
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/27308/1/MPRA_paper_27308.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/27547/2/MPRA_paper_27547.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/27658/1/MPRA_paper_27658.pdf revised version (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:pra:mprapa:27308

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().