Bootstrap Panel Granger-Causality between Government Spending and Revenue

ISEG-UTL Economics Working Paper No. 39/2008/DE/UECE

11 Pages Posted: 7 Dec 2008

See all articles by António Afonso

António Afonso

University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics); ISEG Lisbon School of Economics and Management,Universidade de Lisboa; REM - Research in Economics and Mathematics

Christophe Rault

IZA Institute of Labor Economics; University of Orleans; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 3, 2008

Abstract

Using bootstrap panel analysis, allowing for cross-country correlation, without the need of pre-testing for unit roots, we study the causality between government revenue and spending for the EU in the period 1960-2006. Spend-and-tax causality is found for Italy, France, Spain, Greece, and Portugal, while tax-and-spend evidence is present for Germany, Belgium, Austria Finland and the UK, and for several EU New Member States.

Keywords: panel causality, fiscal policy, EU

JEL Classification: C23, E62, H62

Suggested Citation

Afonso, António and Rault, Christophe and Rault, Christophe, Bootstrap Panel Granger-Causality between Government Spending and Revenue (November 3, 2008). ISEG-UTL Economics Working Paper No. 39/2008/DE/UECE, Available at SSRN: https://ssrn.com/abstract=1310677 or http://dx.doi.org/10.2139/ssrn.1310677

António Afonso (Contact Author)

University of Lisbon - ISEG (School of Economics and Management) ( email )

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Portugal
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HOME PAGE: http://www.iseg.ulisboa.pt/aquila/homepage/aafonso/research

UECE (Research Unit on Complexity and Economics) ( email )

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ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

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REM - Research in Economics and Mathematics ( email )

ISEG, Universidade de Lisboa
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Portugal

HOME PAGE: http://rem.rc.iseg.ulisboa.pt/

Christophe Rault

University of Orleans ( email )

Rue de Blois
BP 6739
LEO, Orleans, Orleans cedex 2 45067
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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