The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia
This study empirically investigates the relationship between government revenue, government expenditure and the copper price in Mongolia, a resource abundant country. Using quarterly data of government revenue, expenditure and international copper price from 2000 to 2015, the results of auto regress...
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| Format: | Article |
| Language: | English |
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Mongolian Academy of Sciences
2020-03-01
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| Series: | Proceedings of the Mongolian Academy of Sciences |
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| Online Access: | https://www.mongoliajol.info/index.php/PMAS/article/view/1294 |
| _version_ | 1818249145641598976 |
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| author | Ariungerel Bayarsaikhan |
| author_facet | Ariungerel Bayarsaikhan |
| author_sort | Ariungerel Bayarsaikhan |
| collection | DOAJ |
| description | This study empirically investigates the relationship between government revenue, government expenditure and the copper price in Mongolia, a resource abundant country. Using quarterly data of government revenue, expenditure and international copper price from 2000 to 2015, the results of auto regression (VAR) show that there is a strong causality from revenue to expenditure, while increase in expenditure, most likely, is not accompanied by rises in revenue. This result is consistent with the revenue-spent hypothesis. Moreover, the result also indicates that copper price shock increases revenue, but decreases expenditure. This finding supports the assumption that the Mongolian government follows its Fiscal Stability Law, a strategy that intends to maintain the stability and sustainability of the government budget. |
| first_indexed | 2024-12-12T15:31:51Z |
| format | Article |
| id | doaj.art-20673c431bab44cd9db4c591537e8ca4 |
| institution | Directory Open Access Journal |
| issn | 2310-4716 2312-2994 |
| language | English |
| last_indexed | 2024-12-12T15:31:51Z |
| publishDate | 2020-03-01 |
| publisher | Mongolian Academy of Sciences |
| record_format | Article |
| series | Proceedings of the Mongolian Academy of Sciences |
| spelling | doaj.art-20673c431bab44cd9db4c591537e8ca42022-12-22T00:20:06ZengMongolian Academy of SciencesProceedings of the Mongolian Academy of Sciences2310-47162312-29942020-03-01273310.5564/pmas.v59i4.12941294The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of MongoliaAriungerel Bayarsaikhan0Risk Management Department, General Department of Taxation, Ulaanbaatar, MongoliaThis study empirically investigates the relationship between government revenue, government expenditure and the copper price in Mongolia, a resource abundant country. Using quarterly data of government revenue, expenditure and international copper price from 2000 to 2015, the results of auto regression (VAR) show that there is a strong causality from revenue to expenditure, while increase in expenditure, most likely, is not accompanied by rises in revenue. This result is consistent with the revenue-spent hypothesis. Moreover, the result also indicates that copper price shock increases revenue, but decreases expenditure. This finding supports the assumption that the Mongolian government follows its Fiscal Stability Law, a strategy that intends to maintain the stability and sustainability of the government budget.https://www.mongoliajol.info/index.php/PMAS/article/view/1294mongoliacopper price shockgovernment revenuegovernment expenditurevector auto regression (var)fiscal stability law (fsl) |
| spellingShingle | Ariungerel Bayarsaikhan The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia Proceedings of the Mongolian Academy of Sciences mongolia copper price shock government revenue government expenditure vector auto regression (var) fiscal stability law (fsl) |
| title | The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia |
| title_full | The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia |
| title_fullStr | The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia |
| title_full_unstemmed | The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia |
| title_short | The Effect of Copper Price Shock on the Relationship between Government Revenue and Expenditure: Testing the Fiscal Stability Law of Mongolia |
| title_sort | effect of copper price shock on the relationship between government revenue and expenditure testing the fiscal stability law of mongolia |
| topic | mongolia copper price shock government revenue government expenditure vector auto regression (var) fiscal stability law (fsl) |
| url | https://www.mongoliajol.info/index.php/PMAS/article/view/1294 |
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