If you are experiencing problems downloading PDF or HTML fulltext, our helpdesk recommend clearing your browser cache and trying again. If you need help in clearing your cache, please click here . Still need help? Email help@ingentaconnect.com

Tax-and-spend, spend-and-tax, or fiscal synchronization: new evidence for ten countries

$54.78 plus tax (Refund Policy)

Buy Article:

Abstract:

Cointegration and vector autoregression are used to test the 'Tax-and-Spend', 'Spend-and-Tax', and 'Fiscal Synchronization' for ten countries using annual time-series data over the period 1951 to 1996. Three of them are part of the newly industrialized countries of Asia (South Korea, Taiwan, and Thailand) and seven are industrialized countries (Australia, Canada, Japan, New Zealand, South Africa, UK, and the USA). This paper includes GDP as a control variable into the model like Baghestani and Mcnown (1994), Ross and Payne (1998), and Koren and Stiassny (1998). The Johansen (1988) and Johansen and Juselius (1990) cointegration test results indicate that these three variables are cointegrated with two cointegrating vectors for South Korea, one vector for Australia, Canada, South Africa, Taiwan, UK, and the USA, and no vector for Japan, New Zealand, and Thailand. The results from Granger causality tests suggest unidirectional causality running from revenues to spending, supporting the 'Tax-and-Spend' hypothesis, for Japan, South Korea, Taiwan, UK, and the USA. The opposite relationship, supporting the 'Spend-andTax' hypothesis, holds only for Australia and South Africa. In the case of Canada, this study finds a feedback existing between revenues and spending, supporting the 'Fiscal Synchronization' hypothesis. For New Zealand and Thailand, these results support none of the hypotheses.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840110103265

Publication date: August 15, 2002

More about this publication?
Related content

Share Content

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more