Public Choice

, Volume 59, Issue 3, pp 287–290

Expenditures and receipts in state and local government finances: Reply

Authors

  • Michael L. Marlow
    • U.S. Department of Treasury
  • Neela Manage
    • Department of EconomicsFlorida Atlantic University
Article

DOI: 10.1007/BF00118542

Cite this article as:
Marlow, M.L. & Manage, N. Public Choice (1988) 59: 287. doi:10.1007/BF00118542
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Conclusion

It is worth repeating that causality testing is a very complex task. The diversity of views on interpreting the definition of causality and on the methods for testing causality highlight this issue. In our study, we cite an excellent article which provides a detailed critique of various problems associated with causality tests (see Conway, et al., 1984). It would appear that Chowdhury's comment draws very strong conclusions and fails to consider some of the complex theoretical issues regarding causality tests as well as important data problems pertaining to state and local governments. Moreover, we find it somewhat curious that, given the strong similarities in our two studies, Chowdhury prefers to dwell on the mechanics of an alternative technique rather than concentrate on the fact that his alternative technique yields supporting results to our 1987 paper on the tax-spend hypothesis.

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© Kluwer Academic Publishers 1988