scholarly journals On the Fiscal Policy in Malaysia: An Econometrical Analysis Between the Revenue – and Expenditure

2020 ◽  
Vol 11 (1) ◽  
pp. 1
Author(s):  
Marco Mele ◽  
Angelo Quarto ◽  
Cristiana Abbafati
Keyword(s):  
Government Spending ◽  
Public Expenditure ◽  
Annual Data ◽  
Government Revenue ◽  
Fiscal Policies ◽  
Budget Deficits ◽  
Causality Tests ◽  
Granger Causality Tests ◽  
Tax Hypothesis ◽  
The Relationship

This study aims to assess the relationship between government spending and government revenue in Malaysia. The study of the causal relationship between revenue and public expenditure has important implications for the choices of fiscal policies in the field of public finances. So, this study uses annual data for the period between 1985 - 2016 with Zivot and Andrews (1992) methods and Granger causality tests. Our results sustain the spend-and-tax hypothesis highlights how the increase in tax pressure is the wrong method to contain budget deficits. In fact, in addition to reducing the disposable income of households, a tax policy of this type would reduce savings. Therefore, also the investment. All this would hurt Malaysia’s economic growth.

scholarly journals Testing the Relationship Between Government Spending and Revenue: Case of Kyrgyzstan

2016 ◽  
Author(s):  
Hakan Çetintaş ◽  
Damira Baigonushova
Keyword(s):  
Government Spending ◽  
Public Expenditure ◽  
Sustainable Growth ◽  
Government Revenue ◽  
Real Economy ◽  
Fiscal Discipline ◽  
Decomposition Approach ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
The Relationship

Sound fiscal policy is very important to promote price stability and sustainable growth in real economy. Thus, understanding the relationship between government spending and revenue is also essential to evaluate how to address fiscal imbalances. So, the focus of this research is to investigate the relationship between government revenue and spending in Kyrgyzstan. For this purpose, we have used an Autoregressive Distributed Lag (ARDL), also Variance Decomposition approach and found that these two data are cointegrated. Findings support “the tax- spend hypothesis” for fiscal discipline in Kyrgyzstan over the period of 1995-2014. In other words, according to the results, increase in real government revenue results in even higher public expenditure.

scholarly journals FDI and Economic Growth in EU13 Countries: Cointegration and Causality Tests

2020 ◽  
Vol 12 (3) ◽  
pp. 47-63
Author(s):  
Vlatka Bilas ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
European Union ◽  
Annual Data ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Panel Ardl ◽  
Long Run ◽  
Causality Tests ◽  
The Relationship

Foreign direct investments are seen as a prerequisite for gaining and maintaining competitiveness. The research objective of this study is to examine the relationship between foreign direct investment (FDI) and economic growth in “new” European Union member countries using various unit root, cointegration, as well as causality tests. The paper employs annual data for FDI and gross domestic product (GDP) from 2002 to 2018 for the 13 most recent members of European Union (EU13): Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. An estimated panel ARDL (PMG) model found evidence that there is a long-run equilibrium between the LogGDP, LogFDI and LogFDIP series, with the rate of adjustment back to equilibrium between 3.27% and 20.67%. In the case of the LogFDI series, long-run coefficients are highly statistically significant in all four models, varying between 0.0828 and 0.3019. These coefficients indicate that a 1% increase in LogFDI increases LogGDP between 0.0828% and 0.3019%. Results of a Dumitrescu-Hurlin panel causality test indicated that a relationship between the GDP growth rate and FDI growth rate is only indirect. Finally, only weak evidence was shown that FDI had a statistically significant impact on GDP in the EU13 countries over the period 2002-2018. This report of findings contributes to the literature concerning FDI and economic growth, namely regarding the current understanding of the relationship between these two factors.

scholarly journals An analysis of the relationship of inflation and unemployment to the gross domestic product (gdp) in zimbabwe

2014 ◽  
Vol 1 (3) ◽  
pp. 156-162
Author(s):  
Tendai Makoni
Keyword(s):  
Time Series ◽  
Gross Domestic Product ◽  
Cointegration Test ◽  
Domestic Product ◽  
Long Run ◽  
Causality Tests ◽  
Granger Causality Tests ◽  
Relationship Of ◽  
The Relationship ◽  
Yearly Data

The time series yearly data for Gross Domestic Product (GDP), inflation and unemployment from 1980 to 2012 was used in the study. First difference of the logged data became stationary as suggested by the time series plots. Johansen Maximum Likelihood Cointegration test indicated a long-run relationship among the variables. Granger Causality tests suggested unidirectional causality between inflation and GDP, implying that GDP is Granger caused by inflation in Zimbabwe. Another unidirectional causality was noted between unemployment and inflation. The causality between unemployment and inflation imply that unemployment do affect GDP indirectly since unemployment influences inflation which in turn positively affect GDP.

scholarly journals The relationship between the relative GDP share of agriculture and the unemployment rate in selected Central and Eastern European countries

2017 ◽  
Vol 63 (No. 7) ◽  
pp. 308-317
Author(s):  
Bein Murad A ◽  
 Ciftcioglu Serhan
Keyword(s):  
Granger Causality ◽  
Unemployment Rate ◽  
European Countries ◽  
Regression Equations ◽  
Eastern European ◽  
Causality Tests ◽  
Dynamic Panel Regression ◽  
Granger Causality Tests ◽  
Eastern European Countries ◽  
The Relationship

The study empirically investigates the relationship between the relative GDP share of agriculture and the unemployment rate in a sample of ten Central and Eastern European countries. Utilising the annual data for the sample period 1996–2013, the empirical analysis is carried out using the dynamic panel regression analysis and the Granger causality tests. The estimation results based on the alternative specification of regression equations for the unemployment rate suggest that the unemployment rate is negatively related to the relative GDP share of agriculture. In addition, a similar effect has been obtained for some other explanatory variables we have included in the unemployment equation as controlling variables: higher investment rate and trade openness are likely to lower the rate of unemployment. The financial development has also been found to be negatively related to the unemployment rate, although the statistical significance of its effect depends on the estimation technique used. On the other hand, the GDP growth and the government consumption have been found to be insignificantly related to the unemployment rate. While the Granger causality tests performed for each country produced evidence of a causal effect of the relative GDP share of agriculture in some countries, in some other countries the direction of causality has been found to be from the unemployment rate to the relative GDP share of agriculture. Our findings suggest that agriculture may play a potential role in lowering the prevailing rates of high unemployment; but this potential is likely to vary between countries.  

A Replication of “Is Public Expenditure Productive?” (Journal of Monetary Economics, 1989)

2017 ◽  
Vol 47 (3) ◽  
pp. 623-629
Author(s):  
Christopher Clarke ◽  
Raymond G. Batina
Keyword(s):  
Public Expenditure ◽  
Monetary Economics ◽  
Public Capital ◽  
Data Sources ◽  
Exact Methods ◽  
Us Economy ◽  
The Us ◽  
Causality Tests ◽  
Granger Causality Tests ◽  
The Impact

We replicate the results of the landmark paper by Aschauer (1989) on the impact of public capital on the US economy. We obtained data from his stated sources and followed his exact methods and are able to replicate his main results. We also extend his data to the period 1949 to 2015, use different data sources, DOLS and VECM estimation, and Granger causality tests. We are again able to replicate his results. Please see the longer version of our article for details.

New Evidence of Dynamic Links between Tourism and Economic Growth Based on Mixed-Frequency Granger Causality Tests

2017 ◽  
Vol 57 (7) ◽  
pp. 899-907 ◽  
Author(s):  
Han Liu ◽  
Haiyan Song
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Large Body ◽  
P Value ◽  
Mixed Frequency ◽  
Causality Tests ◽  
Short Run ◽  
Empirical Regularities ◽  
Granger Causality Tests ◽  
The Relationship

The relationship between tourism and economic growth has created a large body of literature investigating the hypotheses of tourism-led economic growth (TLEGH) and economy-driven tourism growth (EDTGH). In this article, we use mixed-frequency Granger causality tests to investigate the relationship between the two types of growth in Hong Kong from 1974 to 2016. Our analysis reveals the following empirical regularities. First, the hidden short-run causality of TLEGH is detected, and EDTGH is proved in the short run and also in the long run when Granger causality tests are performed in a mixed-frequency framework. Second, mixed-frequency Granger tests demonstrate more power in testing the TLEGH and EDTGH via the rejection frequencies (bootstrap p value). Finally, rolling Granger causality tests reveal an unstable relationship between tourism and economic growth in both magnitude and direction, and the relationship is highly economic- and tourism-event-dependent.

The Relationship between Financial Development and Unemployment in Selected Countries of the European Union

2017 ◽  
Vol 25 (2) ◽  
pp. 307-319 ◽  
Author(s):  
Serhan Çiftçioğlu ◽  
Murad A. Bein
Keyword(s):  
Financial Development ◽  
Unemployment Rate ◽  
Causal Effect ◽  
Annual Data ◽  
The European Union ◽  
Explanatory Variables ◽  
Panel Regressions ◽  
Causality Tests ◽  
Proxy Measure ◽  
The Relationship

This article empirically examines the relationship between alternative measures of financial development and the unemployment rate in a selected group of ten EU countries. Using annual data for the sample period of 1991–2012, we first perform different panel regressions (using averaged and non-averaged versions of data) for unemployment rate. These panel regressions are based on a regression equation that includes inflation rate and growth rate of GDP, in addition to the level of financial development, as explanatory variables. Secondly, we apply Granger causality tests to investigate the nature of the causality between financial development and the unemployment rate for each country in our sample. The empirical findings suggest that unemployment rate and financial development are negatively correlated, and there is a statistically significant causal effect of financial development on unemployment in certain countries. However, the results are not robust to the choice of proxy measure for financial development.

scholarly journals The Impact of Public Expenditure on Economic Growth: A Review of International Literature

2019 ◽  
Vol 19 (2) ◽  
pp. 81-101
Author(s):  
Sheilla Nyasha ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Empirical Evidence ◽  
Government Spending ◽  
Public Expenditure ◽  
Negative Impact ◽  
Positive Impact ◽  
Government Expenditure ◽  
Empirical Literature ◽  
The Impact ◽  
The Relationship

Abstract Research background: Although a number of studies have been conducted on the relationship between public expenditure and economic growth, it is difficult to tell with certainty whether or not an increase in public expenditure is good for economic growth. This lack of consensus on the results of the previous empirical findings makes this study of paramount importance as we take stock of the available empirical evidence from the 1980s to date. Purpose: In this paper, theoretical and empirical literature on the relationship between government expenditure and economic growth has been reviewed in detail. Focus was placed on the review of literature that assessed the impact of government spending on economic growth. Research Methodology: This study grouped studies on the impact of public expenditure on economic growth based on their results. Three groups emerged – positive impact, negative impact and no impact. This was followed by a review of each relevant study and an evaluation of which outcome was more prevalent among the existing studies on the subject. Results: The literature reviewed has shown that the impact of government spending on economic growth is not clear cut. It varies from positive to negative; with some studies even finding no impact. Although the impact of government spending on economic growth was found to be inconclusive, the scale tilts towards a positive impact. Novelty: The study provides an insight into the relationship between public expenditure and economic growth based on a comprehensive review of previous empirical evidence across various countries since the 1980s.

scholarly journals Causality Tests and the Relative Effectiveness of Monetary and Fiscal Policies in Pakistan

1992 ◽  
Vol 31 (4II) ◽  
pp. 759-769
Author(s):  
Muhammad Hussain
Keyword(s):  
Monetary Policy ◽  
Economic Activity ◽  
Relative Effectiveness ◽  
Government Expenditure ◽  
Annual Data ◽  
Fiscal Policies ◽  
Money Stock ◽  
Causality Tests ◽  
Relevant Variables ◽  
Total Government Expenditure

The Granger and the Sims causality tests as applied to annual data from Pakistan for the period 1971-72 to 1989-90, help us in arriving at identical conclusions even though in the former test growth rates of the relevant variables were used and in the latter natural logged and filtered variables were used. Both tests detected unidirectional causality running from monetary variables (monetary base and money stock) to nominal GNP in Pakistan for the period under study. Both tests also suggest that there is unidirectional causality running from nominal GNP to the total government expenditure in Pakistan for the period under study. The findings of the study suggest that changes in monetary variables do exert their influence on economic activity, represented by the nominal GNP, in Pakistan. The results of the study also provide some evidence that changes in total government expenditure rather than causing changes in the nominal GNP in Pakistan, are rather influenced by the changes in the nominal GNP. Thus, the findings of the study suggest that the monetary policy was relatively more effective than the fiscal policy in influencing the nominal GNP in Pakistan, during the period under study.

A Note on the Relation between Government Expenditure and Receipts in Italy: A Quarterly Analysis

2003 ◽  
Vol 21 (1) ◽  
pp. 63-79
Author(s):  
Giovanna Tagliabue
Keyword(s):  
Government Spending ◽  
Central Government ◽  
Government Expenditure ◽  
Budget Deficits ◽  
Quarterly Data ◽  
Tax Revenues ◽  
Precise Knowledge ◽  
Short Run ◽  
The Relationship ◽  
Automatic Stabiliser

Abstract A precise knowledge of the relation between government expenditure and revenues may be useful to control budget deficits because, if there is interdependence, raising taxes to reduce deficits may lead directly to more spending. An effective manipulation of central government spending and tax revenues requires information on the direction of causality between these economic variables.The purpose of this paper is to investigate the relationship between government expenditure and receipts based on quarterly data, using the structural cointegration approach of Pesaran and Pesaran [1997]. In the results presented below, the structural cointegration approach provides evidence of a long and short-run equilibrium between government spending and receipts, supporting the assumption that the Italian Government’s expenditure is a sort of automatic stabiliser as opposed to Wagner’s Law.

Sign in / Sign up

Export Citation Format

Share Document