Government revenue and expenditure nexus in South Africa

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Authors

Nyamongo, M.E. (Nyamongo Esman)
Sichei, Moses Muse
Schoeman, N.J. (Nicolaas Johannes)

Journal Title

Journal ISSN

Volume Title

Publisher

Juta

Abstract

This paper investigates the nexus between government expenditure and government revenue in South Africa within the framework of a vector autoregressive (VAR) approach. It uses the Hylleberg et al. (1990) method to test for seasonal unit roots and finds that government revenue and government expenditure have unit roots at all frequencies. The Johansen procedure test results reveal that these variables are cointegrated. It is further established that revenue and expenditure are linked bidirectionally by Granger causality in the long-run, while there is no evidence of Granger causality in the short-run in South Africa.

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Keywords

South African government expenditure, South African government revenue, Vector autoregressive (VAR) model, Granger causality

Sustainable Development Goals

Citation

Nyamongo, ME, Sichei, MM & Schoeman, NJ 2007, 'Government revenue and expenditure nexus in South Africa', South African Journal of Economic and Management Sciences, vol. 10, no. 2, pp. 256-269. [http://www.journals.co.za/ej/ejour_ecoman.html]