IDEAS home Printed from https://ideas.repec.org/a/taf/jocebs/v6y2008i1p99-107.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/14765280701841581
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/14765280701841581?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mohammad Hasan & Ian Lincoln, 1997. "Tax then spend or spend then tax? Experience in the UK, 1961-93," Applied Economics Letters, Taylor & Francis Journals, vol. 4(4), pages 237-239.
    2. Oluwole Owoye, 1995. "The causal relationship between taxes and expenditures in the G7 countries: cointegration and error-correction models," Applied Economics Letters, Taylor & Francis Journals, vol. 2(1), pages 19-22.
    3. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    4. Hatemi-J, Abdulnasser, 2002. "Fiscal policy in Sweden: effects of EMU criteria convergence," Economic Modelling, Elsevier, vol. 19(1), pages 121-136, January.
    5. Koren, Stephan & Stiassny, Alfred, 1998. "Tax and Spend, or Spend and Tax? An International Study," Journal of Policy Modeling, Elsevier, vol. 20(2), pages 163-191, April.
    6. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    7. Narayan, Paresh Kumar, 2005. "The government revenue and government expenditure nexus: empirical evidence from nine Asian countries," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1203-1216, January.
    8. Jones, Jonathan D. & Joulfaian, David, 1991. "Federal govemment expenditures and revenues in the early years of the American republic: Evidence from 1792 to 1860," Journal of Macroeconomics, Elsevier, vol. 13(1), pages 133-155.
    9. Barro, Robert J, 1979. "On the Determination of the Public Debt," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 940-971, October.
    10. Nieh, Chien-Chung & Ho, Tsung-wu, 2006. "Does the expansionary government spending crowd out the private consumption?: Cointegration analysis in panel data," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(1), pages 133-148, February.
    11. Zapata, Hector O & Rambaldi, Alicia N, 1997. "Monte Carlo Evidence on Cointegration and Causation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 285-298, May.
    12. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    13. Hall, Alastair R, 1994. "Testing for a Unit Root in Time Series with Pretest Data-Based Model Selection," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(4), pages 461-470, October.
    14. Yamada, Hiroshi & Toda, Hiro Y., 1998. "Inference in possibly integrated vector autoregressive models: some finite sample evidence," Journal of Econometrics, Elsevier, vol. 86(1), pages 55-95, June.
    15. Baffes, John & Shah, Anwar, 1994. "Causality and comovement between taxes and expenditures: Historical evidence from Argentina, Brazil, and Mexico," Journal of Development Economics, Elsevier, vol. 44(2), pages 311-331, August.
    16. Paresh Kumar Narayan & Seema Narayan, 2006. "Government revenue and government expenditure nexus: evidence from developing countries," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 285-291.
    17. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    18. James Payne, 1997. "The tax-spend debate: the case of Canada," Applied Economics Letters, Taylor & Francis Journals, vol. 4(6), pages 381-386.
    19. von Furstenberg, George M & Green, R Jeffrey & Jeong, Jin-Ho, 1986. "Tax and Spend, or Spend and Tax?," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 179-188, May.
    20. Abdulnasser Hatemi-J & Ghazi Shukur, 1999. "The causal nexus of government spending and revenue in Finland: a bootstrap approach," Applied Economics Letters, Taylor & Francis Journals, vol. 6(10), pages 641-644.
    21. Alan T. Peacock & Jack Wiseman, 1979. "Approaches To the Analysis of Government Expenditure Growth," Public Finance Review, , vol. 7(1), pages 3-23, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yaya Keho, 2010. "Spending Cuts or Tax Adjustments: How Can UEMOA Countries Control Their Budget Deficits?," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 9(3), pages 233-252, December.
    2. A. Phiri, 2019. "Asymmetries in the revenue–expenditure nexus: new evidence from South Africa," Empirical Economics, Springer, vol. 56(5), pages 1515-1547, May.
    3. Edward Ghartey, 2010. "Cointegration and Causal Relationship between Taxes and Spending for Kenya, Nigeria and South Africa," International Economic Journal, Taylor & Francis Journals, vol. 24(2), pages 267-282.
    4. Ghartey, Edward E., 2008. "The budgetary process and economic growth: Empirical evidence of the Jamaican economy," Economic Modelling, Elsevier, vol. 25(6), pages 1128-1136, November.
    5. George A. Vamvoukas, 2011. "Panel Data Modeling and the Tax-Spend Controversy in the Euro Zone," Post-Print hal-00716629, HAL.
    6. Arvin, Mak B. & Pradhan, Rudra P. & Nair, Mahendhiran S., 2021. "Are there links between institutional quality, government expenditure, tax revenue and economic growth? Evidence from low-income and lower middle-income countries," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 468-489.
    7. Athanasios Athanasenas & Constantinos Katrakilidis & Emmanouil Trachanas, 2014. "Government spending and revenues in the Greek economy: evidence from nonlinear cointegration," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(2), pages 365-376, May.
    8. George A Vamvoukas, 2012. "Panel data modelling and the tax-spend controversy in the euro zone," Applied Economics, Taylor & Francis Journals, vol. 44(31), pages 4073-4085, November.
    9. James E. Payne, 2003. "A Survey of the International Empirical Evidence on the Tax-Spend Debate," Public Finance Review, , vol. 31(3), pages 302-324, May.
    10. GHARTEY, Edward E., 2010. "Government Expenditures And Revenues Causation: Some Caribbean Empirical Evidence," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(2).
    11. Paresh Kumar Narayan & Seema Narayan, 2006. "Government revenue and government expenditure nexus: evidence from developing countries," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 285-291.
    12. Tsangyao Chang & Yuan-Hong Ho, 2002. "A Note on Testing ¡°Tax-and-Spend, Spend-and-Tax or Fiscal Synchronization¡±: The Case of China," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(1), pages 151-160, June.
    13. Oyeyinka OMOSHORO-JONES, 2020. "Investigating The Government Revenue–Expenditure Nexus: Empirical Evidence For The Free State Province In A Multivariate Model," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 11(2), pages 138-156.
    14. Francisco de Castro & José M. González-Páramo & Pablo Hernández de Cos, 2001. "Evaluating the dynamics of fiscal policy in Spain: patterns of interdependence and consistency of public expenditure and revenues," Working Papers 0103, Banco de España.
    15. Emre BULUT & Dilek ÇİL, 2024. "Asymmetric Causality Relationship Between Public Expenditures and Tax Revenues: Transition Economies Case," Sosyoekonomi Journal, Sosyoekonomi Society, issue 32(60).
    16. Aliyu Alhaji Jibrilla, 2016. "Fiscal sustainability in the presence of structural breaks: Does overconfidence on resource exports hurt government’s ability to finance debt? Evidence from Nigeria," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1170317-117, December.
    17. Saunoris, James W. & Payne, James E., 2010. "Tax more or spend less? Asymmetries in the UK revenue-expenditure nexus," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 478-487, July.
    18. Ibrahim, Taofik, 2018. "Government expenditure-revenue nexus reconsidered for Nigeria: Does structural break matter?," MPRA Paper 86220, University Library of Munich, Germany, revised 21 Oct 2017.
    19. G A Vamvoukas, 2011. "The Tax-Spend Debate with an Application to the EU," Economic Issues Journal Articles, Economic Issues, vol. 16(1), pages 65-88, March.
    20. Narayan, Paresh Kumar, 2005. "The government revenue and government expenditure nexus: empirical evidence from nine Asian countries," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1203-1216, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jocebs:v:6:y:2008:i:1:p:99-107. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RCEA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.