Taiwan’s and China’s Budgetary Decision Making：Evidence from Panel Data Analysis

• Main Authors: Yu-jui Kuo, 郭育瑞
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/77743117205915278523

碩士 === 逢甲大學 === 財稅所 === 95 === For resolving the budget deficit problem, some economists have advocated spending cuts, while others support either tax increases or tax cuts. This paper investigates the long-run relationship between two fiscal variables for Taiwan and China using panel error correction model, and tests incremental decision-making in the short-run budgeting process. This paper uses the nominal data and real data of Taiwan and China. The nominal data is from 1956 to 2005 and the real data is from 1965 to 2004. Using Levin , Lin and Chu and IPS panel unit root test; panel cointegration test and panel error correction model to test the relationship between government expenditures, government revenues and GDP. The results show that, in the long-run, revenues and expenditures force the budget toward balance synchronously in Taiwan and China using either nominal data or real data. In the short-run, incrementalism occurs in both revenues and expenditures in Taiwan and China using either nominal data or real data.