Changes in the revenue–expenditure nexus: confronting evidence with fiscal policy in Brazil

Linhares, Fabrício Carneiro; Nojosa, Glauber; Bezerra, Rogério de Maicy

doi:10.1080/00036846.2021.1915463

Cited by 7 publications

(5 citation statements)

References 39 publications

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“…This implies that in Mauritius and Mozambique, revenue adjustments are determined by current and past expenditures. Hence, a rise in current expenditures will inevitably require future revenues to also increase (Linhares et al 2021). Accordingly, to effectively eliminate fiscal imbalances, increasing taxes, reducing spending, or both are viable policy options.…”

Section: Resultsmentioning

confidence: 99%

Tax-Spend or Spend-Tax? The Case of Southern Africa

Nzimande

Ngalawa

2022

Economies

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Whether to increase taxes or cut spending is an important question with profound policy implications, especially as countries attempt to deal with the consequences of the COVID-19 pandemic. This study, therefore, investigated the relationship between revenues and spending in the Southern African Development Community (SADC), where concerns about rising debt and deficits were raised prior to the pandemic. A panel bootstrap Granger-causality technique was used to analyze annual frequency data covering the 1980–2018 period. To our best knowledge, this was the first study in Africa to simultaneously account for cross-country differences and cross-section dependence. The findings of the study have in-depth implications for fiscal policy and adjustments towards budgetary equilibria. The study found no evidence of causality between revenues and spending in eleven SADC member states, suggesting that to balance their respective budgets, governments in these countries can alter either spending or revenues, or both. However, in Botswana, we found evidence of the tax-spend hypothesis, implying that governments should consider altering revenues to eliminate budget imbalances. Finally, evidence of the spend-tax hypothesis was found in Mauritius and Mozambique, suggesting that past and current expenditures drive revenues in these countries. Accordingly, cutting spending would be an ideal policy recourse to deal with budgetary disequilibrium.

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Section: Resultsmentioning

confidence: 99%

Tax-Spend or Spend-Tax? The Case of Southern Africa

Nzimande

Ngalawa

2022

Economies

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“…She found empirical evidence in favor of the tax-and-spend hypothesis for the short run and fiscal synchronization for the long run periods. Linhares et al (2021) also found opposing evidence in Brazil on tax-spend debate. Their empirical findings revealed that the fiscal synchronization was valid for the period of 2005 to 2008, while spend-and-tax hypothesis held from 2010 to 2013 and the tax-and-spend hypothesis was in effect between 2015 and 2018.…”

Section: Literature Reviewmentioning

confidence: 99%

Government Expenditures and Tax Revenues in the United States of America

Kırıkkaleli

Ozbeser

2023

Sage Open

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This study explores the time-frequency dependency between government expenditures and tax revenues by employing the wavelet coherence approach using data from the United States of America (USA) for the period of 1960Q2 to 2019Q3. The four leading concepts regarding the correlation between government expenditures and tax revenues are the tax-and-spend, spend-and-tax, fiscal synchronization and institutional separation hypotheses. Our results indicate that government expenditures lead to tax revenues in both the short and long run for specific time intervals as proposed by the spend-and-tax hypothesis.

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“…Evidence supports the fiscal synchronization hypothesis in Sweden and Germany and the spend-tax hypothesis in Greece. Linhares & Nojosa (2020), dividing the study period before and after the 2008 global financial crisis 2008, found several changes in the direction of the causal association between government income and spending in Germany, England, France, Italy, etc. and Spain.…”

Section: Empirical Studiesmentioning

confidence: 99%

Government Revenue and Government Spending Nexus: A Testing Hypothesis for Indonesia

Solikin

Nizar²

2023

j. borneo adm.

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There are still differences of opinion about the connection between government expenditure and revenues. This study aims to test hypotheses related to the direction of the relationship between Indonesian government revenues and expenses. By utilizing quarterly time-series data in the period 1969: q2 – 2020: q4, the test was implemented using the Vector Autoregressive (VAR) model. The test results show that an increase in total government revenue and tax revenue causes an increase in government spending during the study period. The results of this study provide supporting evidence for the revenue-and-expenditure or tax-and-spending hypothesis for the Indonesian government budget. The implication is that the government budget is always in deficit, and the need for financing (i.e., loans) is unavoidable

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Changes in the revenue–expenditure nexus: confronting evidence with fiscal policy in Brazil

Cited by 7 publications

References 39 publications

Tax-Spend or Spend-Tax? The Case of Southern Africa

Tax-Spend or Spend-Tax? The Case of Southern Africa

Government Expenditures and Tax Revenues in the United States of America

Government Revenue and Government Spending Nexus: A Testing Hypothesis for Indonesia

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