Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30639
Authors: 
Afonso, António
Rault, Christophe
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper 2705
Abstract: 
Using bootstrap panel analysis, allowing for cross-country correlation, without the need of pre-testing for unit roots, we study the causality between government spending and revenue for the EU in the period 1960-2006. We find spend-and-tax causality for Italy, France, Spain, Greece, and Portugal, while tax-and-spend evidence is present for Germany, Belgium, Austria Finland and the UK, and for several EU New Member States. Moreover, in the run-up to EMU there was some shifting away from a spend-and-tax strategy, implying adjustments of fiscal behaviour.
Subjects: 
panel causality
fiscal policy
EU
JEL: 
C23
E62
H62
Document Type: 
Working Paper

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