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
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: Suggested Citation
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