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Government Expenditure and National Income: Causality Tests for Twelve New Members of E.E

Author

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  • Chaido Dritsaki

    (Technological Institute of Western Macedonia)

  • Melina Dritsaki

    (Brunel University, West London)

Abstract

This study aims to determine the direction of causality between national income and government expenditures for twelve new members of E.E. namely Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Romania, Slovenia, and Slovakia. Support for the hypothesis that causality runs from government expenditures to national income has been found only in the case of Bulgaria and Cyprus. The results of Granger causality tests indicate that Wagner’s law is supported by the data of countries (Cyprus, Poland, and Romania) in our sample.

Suggested Citation

  • Chaido Dritsaki & Melina Dritsaki, 2010. "Government Expenditure and National Income: Causality Tests for Twelve New Members of E.E," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(38), pages 67-89, December.
    • Handle: RePEc:rej:journl:v:13:y:2010:i:38:p:67-89
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    References listed on IDEAS

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    Cited by:

    1. Cristian C. Popescu & Laura Diaconu (Maxim), 2021. "Government Spending and Economic Growth: A Cointegration Analysis on Romania," Sustainability, MDPI, vol. 13(12), pages 1-16, June.

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    More about this item

    Keywords

    Government Expenditure; National Income; Twelve New Members of E.E; Unit Root; Cointegration; Causality;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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