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Untangling the web of causalities among four disaggregate government expenditures, government revenue and output in Taiwan

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  • Shyh-Wei Chen

Abstract

Using Taiwan data, this empirical study delves into the causal links among four disaggregate real government expenditures, real government revenue and real output. The results substantiate that there is (i) neutrality between real government revenue and real government expenditure on economic development; (ii) unidirectional causality from real government revenue to real government expenditures on national defence, on general administration and on education, science and culture, confirming the tax-and-spend hypothesis; (iii) neutrality between output and the four disaggregate government expenditures; and (iv) unidirectional causality from real output to real government revenue. Several implications emerge from our empirical results.

Suggested Citation

  • Shyh-Wei Chen, 2008. "Untangling the web of causalities among four disaggregate government expenditures, government revenue and output in Taiwan," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(1), pages 99-107.
    • Handle: RePEc:taf:jocebs:v:6:y:2008:i:1:p:99-107
    DOI: 10.1080/14765280701841581
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    Cited by:

    1. HYE, Qazi Muhammad Adnan & M Anwar, Jalil, 2010. "Revenue and Expenditure Nexus: A Case Study of Romania," MPRA Paper 32132, University Library of Munich, Germany.

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