ON THE SUSTAINABILITY AND SYNCHRONIZATION OF FISCAL POLICY IN LATIN AMERICA
This paper explores the sustainability of fiscal policy for a panel of Latin American countries over the period 1990-2012. We extend the literature on the causal relationship between government expenditure (GX) and revenue (GR) in the short run and long run. Our results show a significant long-run r...
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| Autores principales: | , |
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| Lenguaje: | English |
| Publicado: |
Pontificia Universidad Católica de Chile. Instituto de Economía.
2015
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| Materias: | |
| Acceso en línea: | http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332015000200004 |
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| Sumario: | This paper explores the sustainability of fiscal policy for a panel of Latin American countries over the period 1990-2012. We extend the literature on the causal relationship between government expenditure (GX) and revenue (GR) in the short run and long run. Our results show a significant long-run relationship between GX and GR, suggesting that fiscal policies are consistent with their intertemporal budget constraints. We establish bidirectional causality between revenue and expenditure in the long run, indicating a contribution from both GX and GR in establishing steady state equilibrium following substantial deviations. Our data also uphold the fiscal synchronization thesis. |
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