| Article Information |
| Journal: |
Business and Economics Research Journal |
| Title of Article: |
Investigation of The Relationship of Tax Revenues and Government Expenditures in Turkey: Evidence by Fourier Approaches |
| Author(s): |
Abdullah Emre Caglar, Ersin Yavuz |
| Volume: |
13 |
| Number: |
4 |
| Year: |
2022 |
| Page: |
657-669 |
| ISSN: |
2619-9491 |
| DOI Number: |
10.20409/berj.2022.395 |
|
| Abstract |
| The aim of the study is to test the validity of tax-spend, spend-tax, fiscal synchronization, and institutional separation hypotheses in the relationship between tax revenues and government expenditures in Turkey for the period 1975-2021. In analysis, Enders and Lee (2012) ADF type Fourier unit root test, Tsong et al. (2016) Fourier cointegration approach, DOLS estimator, and Nazlioglu et al. (2016) Fourier Toda-Yamamoto causality test is applied. As a result of the analysis, the Fourier cointegration approach reveals that there is a cointegration relationship between the variables in the model where tax revenues are the dependent variable. According to the DOLS estimator, a 1% increase in government expenditures positively affects tax revenues by 0.66%. The causality findings provide evidence that there is unidirectional causality from government expenditures to tax revenues. As a result, the findings indicate that the expenditure-tax hypothesis is valid in the examined period. Therefore, governments should focus on government expenditures in order to balance the budget. |
| Keywords: |
Tax Revenues, Government Expenditures, Fourier Causality, Fourier Cointegration |
|
| JEL Classification: |
C23, H20, H50 |
|
