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Fiscal policy in Sweden: effects of EMU criteria convergence

Hatemi-J, Abdulnasser LU (2002) In Economic Modelling 19(1). p.121-136
Abstract
This paper investigates the sustainability of Swedish fiscal policy performed during the period 1963-2000. The main emphasis is on assessing the effects of changes in fiscal policy, such as changes in taxes or public spending. On the basis of Johansen's VAR and the augmented Granger causality tests, the results show that taxes and spending are causally related in the long-run and the homogeneity condition is supported empirically. The effect of EMU criteria convergence on fiscal policy is also investigated empirically. The 'Pantula principle' is applied to determine the form of deterministic trend component. Special attention is given to the lag-choosing process. The policy implication of our findings is that Sweden is not in violation of... (More)
This paper investigates the sustainability of Swedish fiscal policy performed during the period 1963-2000. The main emphasis is on assessing the effects of changes in fiscal policy, such as changes in taxes or public spending. On the basis of Johansen's VAR and the augmented Granger causality tests, the results show that taxes and spending are causally related in the long-run and the homogeneity condition is supported empirically. The effect of EMU criteria convergence on fiscal policy is also investigated empirically. The 'Pantula principle' is applied to determine the form of deterministic trend component. Special attention is given to the lag-choosing process. The policy implication of our findings is that Sweden is not in violation of its intertemporal budget constraint. (C) 2002 Elsevier Science B.V. All rights reserved. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
cointegration, Granger causality, spending, revenue, Johansen's VAR, EMU
in
Economic Modelling
volume
19
issue
1
pages
121 - 136
publisher
Elsevier
external identifiers
  • wos:000173192000007
  • scopus:10644275217
ISSN
0264-9993
DOI
10.1016/S0264-9993(00)00066-3
language
English
LU publication?
yes
id
4a362192-2fea-4f16-ade5-b326ad05011d (old id 893817)
date added to LUP
2008-01-23 11:13:27
date last changed
2017-04-16 03:24:53
@article{4a362192-2fea-4f16-ade5-b326ad05011d,
  abstract     = {This paper investigates the sustainability of Swedish fiscal policy performed during the period 1963-2000. The main emphasis is on assessing the effects of changes in fiscal policy, such as changes in taxes or public spending. On the basis of Johansen's VAR and the augmented Granger causality tests, the results show that taxes and spending are causally related in the long-run and the homogeneity condition is supported empirically. The effect of EMU criteria convergence on fiscal policy is also investigated empirically. The 'Pantula principle' is applied to determine the form of deterministic trend component. Special attention is given to the lag-choosing process. The policy implication of our findings is that Sweden is not in violation of its intertemporal budget constraint. (C) 2002 Elsevier Science B.V. All rights reserved.},
  author       = {Hatemi-J, Abdulnasser},
  issn         = {0264-9993},
  keyword      = {cointegration,Granger causality,spending,revenue,Johansen's VAR,EMU},
  language     = {eng},
  number       = {1},
  pages        = {121--136},
  publisher    = {Elsevier},
  series       = {Economic Modelling},
  title        = {Fiscal policy in Sweden: effects of EMU criteria convergence},
  url          = {http://dx.doi.org/10.1016/S0264-9993(00)00066-3},
  volume       = {19},
  year         = {2002},
}