Magazzino, Cosimo and Dalena, Michele (2010): Public expenditure and revenue in Italy, 1862-1993.
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This study examines the long-run equilibrium relationship between government expenditure and revenue in Italy from 1862 to 1993, using cointegration techniques and the direction of causality relationship in the long and short runs between the variables through integrating the Error Correction Model (ECM) into the traditional Granger causality test. A Granger non-causality test (due to Toda and Yamamoto) is also performed. Unit root tests have been applied in order to investigate the stationarity properties of the series. Moreover, three more homogeneous sub-period (1862-1913; 1914-1946; 1947-1993) have been analyzed. The nexus between public expenditure and revenue has been discussed also by Impulse Response Functions (IRFs) and Forecast Error Variance Decompositions (FEVDs). Empirical findings show how, for each sub-period, the policy adopted reflect the prevailing paradigm of public finance (neutral or orthodox finance, Keynesian finance and discretionary or compensatory finance, respectively).
|Item Type:||MPRA Paper|
|Original Title:||Public expenditure and revenue in Italy, 1862-1993|
|English Title:||Public expenditure and revenue in Italy, 1862-1993|
|Keywords:||Government expenditure; government revenue; stationarity; cointegration; causality; spend and tax; tax and spend; Italy|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
|Depositing User:||Cosimo Magazzino|
|Date Deposited:||23. Dec 2010 07:34|
|Last Modified:||13. Feb 2013 19:49|
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Public expenditure and revenue in Italy, 1862-1993. (deposited 13. Dec 2010 18:24)
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