An Illustration of the Causality Relation between Government Spending and Revenue Using Wavelets Analysis on Finish Data
نویسندگان
چکیده
Abdullah Almasri and Ghazi Shukur Department of Statistics Göteborg University P.O. Box 660SE 405 30 Göteborg, Sweden ABSTRACT Quarterly data for the period 1960:1 to 1997:2, conventional tests, a bootstrap simulation approach and a multivariate Rao’s F-test have been used to investigate if, the causality between government spending and revenue in Finland have been changed at the beginning of 1990 due to future plans to create the European Monetary Union (EMU). The results indicated that during the period before 1990, the government revenue Granger caused spending, while the opposite has happened after 1990, which agrees better with Barro’s tax smoothing hypothesis. However, when using monthly data instead of quarterly data for almost the same sample period, totally different results have been noted.
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