CAUSALITY BETWEEN PUBLIC REVENUES AND EXPENDITURES COMPARATIVE ANALYSIS OF MACEDONIA AND ALBANIA
Journal Title: Knowledge International Journal - Year 2018, Vol 26, Issue 1
Abstract
The main objective of this paper is to analyze causality between government revenues and expenditures of two countries, Macedonia and Albania to interpret their comparative Granger causality results. In addition, this empirical analysis is conducted through quarterly time series data for Macedonia and Albania for public revenues and expenditures, for time period 2004-2016. Moreover, empirical results of this study did not found a consensus regarding the causal link between public revenues and expenditures. Moreover, Granger causality was employed in order to analyze the causal relationship between public revenues and expenditures in these countries. Further, our results suggest existence of unidirectional causality between public expenditures and revenues in both countries, suggesting the existence of tax – spend hypothesis, thus causality running from revenues to expenditures. In addition, this paper tries to add a solid contribution to the empirical debate of the causal link between public revenues and public expenditures by using data from western Balkan countries such as Albania and Macedonia, to be used as further recommendation regarding their future budget deficit planning policy.
Authors and Affiliations
Liza Alili Sulejmani, Alit Ibraimi
Keywords
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- EP ID EP50061
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