Spend-and-tax : a panel data investigation for the EU

António Afonso ; Christophe Rault

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. -- panel causality ; fiscal policy ; EU

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Year of publication:	2009
Authors:	Afonso, António ; Rault, Christophe
Publisher:	München : CESifo
Subject:	Finanzpolitik \| Fiscal policy \| Steuervermeidung \| Tax avoidance \| Öffentliche Ausgaben \| Public expenditure \| Kausalanalyse \| Causality analysis \| EU-Staaten \| EU countries \| Europäische Union \| Geschichte 1960-2006 \| 1960-2006