Abstract

JAEN-GARCIA, Manuel. RELATIONSHIP BETWEEN GOVERNMENT EXPENSES AND REVENUES IN SPAIN, 1958-2014. Semest. Econ. [online]. 2017, vol.20, n.45, pp.25-50. ISSN 0120-6346.  https://doi.org/10.22395/seec.v20n45a1.

This article uses co-integration and causality methodology in time series to analyze the relationship between income and expenditure, expenditure and income in the Spanish economy during the period 1958-2014. The possible structural change in both series during the period under study has been taken into account, as well as the possible existence of both short-term and long-term causality. The results show causality in the direction of revenue to expenditure, but not the other way around. Given the importance of reducing the public deficit in Spain, it states that it is necessary to adjust public expenditure downwards with the consequent damage that may occur in Spain's economic growth.

JEL CLASSIFICATION: H00, E21, E62

Keywords : Public expenditure; public revenue; fiscal policy; structural change; co-integration; causality; Spain.

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