A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia
This paper attempts to model the relationship between tax revenue and government expenditure for Indonesia over the period 1970-2007. The empirical analysis employs tests of cointegration and Vector Error Correction Model (VECM). The empirical evidence suggests that there is a long run relationship...
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2011-09-01
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| Series: | Economic Journal of Emerging Markets |
| Online Access: | https://jurnal.uii.ac.id/JEP/article/view/2275 |
| _version_ | 1817969983449202688 |
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| author | Jaka Sriyana |
| author_facet | Jaka Sriyana |
| author_sort | Jaka Sriyana |
| collection | DOAJ |
| description | This paper attempts to model the relationship between tax revenue and government expenditure
for Indonesia over the period 1970-2007. The empirical analysis employs tests of cointegration
and Vector Error Correction Model (VECM). The empirical evidence suggests that
there is a long run relationship between tax and government expenditure, but in the short
term, the model explains unidirectional causality relationship, namely from tax revenue to
govern ment expenditure This finding indicates that the budget deficit increase continuously,
which threaten the fiscal sustainability in the long term. It suggests that the government
should organize a better management on public finance policies to support the tax-spend fiscal
policy.
Key words: tax, government, causality, expenditure, cointegration. |
| first_indexed | 2024-04-13T20:29:22Z |
| format | Article |
| id | doaj.art-5bd09a3c9c5041fcac368fe143ab47f7 |
| institution | Directory Open Access Journal |
| issn | 2086-3128 2502-180X |
| language | English |
| last_indexed | 2024-04-13T20:29:22Z |
| publishDate | 2011-09-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Economic Journal of Emerging Markets |
| spelling | doaj.art-5bd09a3c9c5041fcac368fe143ab47f72022-12-22T02:31:14ZengUniversitas Islam IndonesiaEconomic Journal of Emerging Markets2086-31282502-180X2011-09-011210.20885/ejem.v1i2.2275A Causality Relationship Between Tax Revenue and Government Expenditure In IndonesiaJaka SriyanaThis paper attempts to model the relationship between tax revenue and government expenditure for Indonesia over the period 1970-2007. The empirical analysis employs tests of cointegration and Vector Error Correction Model (VECM). The empirical evidence suggests that there is a long run relationship between tax and government expenditure, but in the short term, the model explains unidirectional causality relationship, namely from tax revenue to govern ment expenditure This finding indicates that the budget deficit increase continuously, which threaten the fiscal sustainability in the long term. It suggests that the government should organize a better management on public finance policies to support the tax-spend fiscal policy. Key words: tax, government, causality, expenditure, cointegration.https://jurnal.uii.ac.id/JEP/article/view/2275 |
| spellingShingle | Jaka Sriyana A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia Economic Journal of Emerging Markets |
| title | A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia |
| title_full | A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia |
| title_fullStr | A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia |
| title_full_unstemmed | A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia |
| title_short | A Causality Relationship Between Tax Revenue and Government Expenditure In Indonesia |
| title_sort | causality relationship between tax revenue and government expenditure in indonesia |
| url | https://jurnal.uii.ac.id/JEP/article/view/2275 |
| work_keys_str_mv | AT jakasriyana acausalityrelationshipbetweentaxrevenueandgovernmentexpenditureinindonesia AT jakasriyana causalityrelationshipbetweentaxrevenueandgovernmentexpenditureinindonesia |