An Investigation of the Public Deficts and Government Spending Relationship: Evidence for Greece

@article{Hondroyiannis2001AnIO,
  title={An Investigation of the Public Deficts and Government Spending Relationship: Evidence for Greece},
  author={George Hondroyiannis and Evangelia Papapetrou},
  journal={Public Choice},
  year={2001},
  volume={107},
  pages={169-182}
}
This paper tests the validity of the Buchanan-Wagner hypothesis for Greece, that increases in public spending are the result of the tolerance of large deficits over the period 1961–1994. To test this hypothesis, three unit-root pretests, the Dickey-Fuller, Phillips-Perron and Kwiatkowski et al. and maximum likelihood estimation techniques of cointegrating vectors and a vector error-correction model are employed. A long-run relationship is found to exist among government spending, deficit… CONTINUE READING

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