This study aims to assess the relationship between government spending and government revenue in Malaysia. The study of the causal relationship between revenue and public expenditure has important implications for the choices of fiscal policies in the field of public finances. So, this study uses annual data for the period between 1985 - 2016 with Zivot and Andrews (1992) methods and Granger causality tests. Our results sustain the spend-and-tax hypothesis highlights how the increase in tax pressure is the wrong method to contain budget deficits. In fact, in addition to reducing the disposable income of households, a tax policy of this type would reduce savings. Therefore, also the investment. All this would hurt Malaysia’s economic growth.
On the Fiscal Policy in Malaysia: An Econometrical Analysis Between the Revenue – and Expenditure / Mele, Marco; Quarto, Angelo; Abbafati, Cristiana. - In: RESEARCH IN WORLD ECONOMY. - ISSN 1923-3981. - 11:1(2020), p. 1. [10.5430/rwe.v11n1p1]
On the Fiscal Policy in Malaysia: An Econometrical Analysis Between the Revenue – and Expenditure
Quarto, Angelo;Abbafati, Cristiana
2020
Abstract
This study aims to assess the relationship between government spending and government revenue in Malaysia. The study of the causal relationship between revenue and public expenditure has important implications for the choices of fiscal policies in the field of public finances. So, this study uses annual data for the period between 1985 - 2016 with Zivot and Andrews (1992) methods and Granger causality tests. Our results sustain the spend-and-tax hypothesis highlights how the increase in tax pressure is the wrong method to contain budget deficits. In fact, in addition to reducing the disposable income of households, a tax policy of this type would reduce savings. Therefore, also the investment. All this would hurt Malaysia’s economic growth.File | Dimensione | Formato | |
---|---|---|---|
Quarto_On-the-Fiscal_2020.pdf
accesso aperto
Tipologia:
Versione editoriale (versione pubblicata con il layout dell'editore)
Licenza:
Tutti i diritti riservati (All rights reserved)
Dimensione
443.81 kB
Formato
Adobe PDF
|
443.81 kB | Adobe PDF |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.