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The Causal Relationship Between Tax Revenues and Expenditures: Evidence from New York State

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  • Rebecca Glover
  • Xueming Luo
  • Mojtaba Seyedian

Abstract

As smaller state budgets become popular among voters, a better understanding of the factors affecting budget balances becomes imperative. This paper tries to shed some light on the issue by analyzing New York State budget data. The results of a Granger-Causality test in conjunction with variance decomposition techniques show that tax revenues, as opposed to expenditures, are the leading factor in creating bigger budgets in New York.

Suggested Citation

  • Rebecca Glover & Xueming Luo & Mojtaba Seyedian, 2002. "The Causal Relationship Between Tax Revenues and Expenditures: Evidence from New York State," New York Economic Review, New York State Economics Association (NYSEA), vol. 33(1), pages 61-66.
    • Handle: RePEc:nye:nyervw:v:33:y:2002:i:1:p:61-66
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