Bootstrap Panel Granger-Causality Between Government Spending and Revenue in the EU
13 Pages Posted: 14 Oct 2009
Date Written: October 13, 2009
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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