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Title: Government spending and revenues in the Greek economy: evidence from nonlinear cointegration
Authors: Athanasenas, Athanasios
Katrakilidis, Constantinos
Trachanas, Emmanouil
Type: Article
Subjects: FRASCATI::Social sciences::Economics and Business::Economics
Keywords: Budget deficit
Fiscal policy
NARDL cointegration
Greek economy
Issue Date: 2013
Source: Empirica
Volume: 41
Issue: 2
First Page: 365
Last Page: 376
Abstract: This paper attempts to re-evaluate the long-run macroeconomic relationship between government revenues and expenditures of the Greek economy over the period 1999–2010. The empirical analysis applies the newly developed asymmetric ARDL cointegration methodology of Shin et al. (2011) which permits more flexibility in the dynamic adjustment process towards equilibrium, than in the classical case of a linear model. Our findings point towards the fiscal synchronization hypothesis, supporting evidence of asymmetric interactions between the two fiscal components in both the long- and the short-run time horizon. More particularly, in the long-run, the negative changes of expenditures dominate the response of revenues, while the opposite applies in the response of expenditures.
ISSN: 0340-8744
Other Identifiers: 10.1007/s10663-013-9221-3
Appears in Collections:Department of Accounting & Finance

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