Abstract
This paper tests the validity of the proposition that there is a causal relationship between government expenditure and government revenue for Greece over the period 1957–1993. The empirical analysis employs tests of cointegration as pre-tests for Granger tests of causality. The empirical evidence suggests that there is a long-run relationship between government spending and government revenue and expenditures cause revenues.
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The authors gratefully acknowledge the comments of an anonymous referee on an earlier draft of this paper. The views expressed in this paper are those of the authors and not those of the Bank of Greece.
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Hondroyiannis, G., Papapetrou, E. An examination of the causal relationship between government spending and revenue: A cointegration analysis. Public Choice 89, 363–374 (1996). https://doi.org/10.1007/BF00159364
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DOI: https://doi.org/10.1007/BF00159364