Government spending and revenues in the Greek economy: evidence from nonlinear cointegration

Athanasenas, Athanasios L.; Katrakilidis, Constantinos; Trachanas, Emmanouil

doi:10.1007/s10663-013-9221-3

Cited by 28 publications

(24 citation statements)

References 36 publications

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“…The evidence of bidirectional causality supports the fiscal synchronization hypothesis proposed by Meltzer and Richard (1981) and Musgrave (1966), which postulates that the voters' choice determines the concurrent adjustment in both tax revenue and spending. This finding is in line with the finding by Tiwari and Mutascu (2016) in the case of Romania and Athanasenas et al (2014) in the case of Greece.…”

Section: Resultssupporting

confidence: 92%

Is the Thai Government Revenue-Spending Nexus Asymmetric?

Jiranyakul

2017

SSRN Journal

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This paper examines the relationship between government revenue and spending in Thailand using a nonlinear framework. Both TAR and MTAR models are estimated. The empirical results from the estimate of the TAR model show the presence of asymmetry in the long-run relationship between revenue and spending. The results of short-run dynamics indicate that both revenue and spending respond to budgetary disequilibrium when there is improving government budget. Furthermore, bidirectional causality is found. The evidence appears to support the fiscal synchronization hypothesis with asymmetric adjustment towards the longrun equilibrium. This finding implies that policymakers should cut deficits when they exceed the threshold level.

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Section: Resultssupporting

confidence: 92%

Is the Thai Government Revenue-Spending Nexus Asymmetric?

Jiranyakul

2017

SSRN Journal

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“…In this case, governments make decisions about revenues and expenditures simultaneously. The studies of Miller and Russek (1989), Hasan and Sukar (1995), Li (2001), Kollias and Paleologou (2006), Paleologou (2013), and Athanasenas et al (2014) have provided evidence for the fiscal synchronization hypothesis.…”

Section: Previous Studiesmentioning

confidence: 96%

Government spending and revenues in Sweden 1722–2011: evidence from hidden cointegration

Irandoust

2017

Empirica

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This study examines the long-run causal relationship between government revenues and spending of the Swedish economy over the period 1722-2011. The results based on hidden cointegration technique and a modified version of the Granger non-causality test, show that there exists a long-run and asymmetric relationship between government spending and government revenues. Our estimation results can be summarized into three main empirical findings. First, the government follows a hard budget constraint and soft budget constraint strategies in the case of negative and positive shocks, respectively. Second, negative shocks to the fiscal budget are removed fairly quickly compared to positive shocks. Third, bi-directional causality between revenues and expenditures offers support in favor of the fiscal synchronization hypothesis. The policy implication is that budget deficit's reduction could be achieved through government spending cut, accompanied by contemporaneous tax controls.

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“…Ma and Kanas (2004) found further strong empirical evidence to support the intrinsic bubble model of stock prices developed by Froot and Obstfeld (1991). Athanasenas et al (2014) conducted analysis of the time series of revenues and expenditures of the Greek government. Their results support the fact that negative rates of expenditure severely affect revenues.…”

Section: Nonlinear Cointegrationmentioning

confidence: 77%