New evidences regarding the tax-spending nexus in Romania through wavelet analysis

Mardi | 2017-01-31
Salle des Thèses de 16h00 à 17h20


The paper investigates the causality between government revenues and government expenditures in the case of Romania, for the period 1991m1-2015m5, by following the wavelet approach. The study offers detailed information of this connection, for different sub-periods of time and frequencies, emphasizing the lead-lag nexus between variables under cyclical and anti-cyclical shocks. The main findings show that the treasury goals should be controlled by using the individual taxation techniques under structural reforms. Separately, when the economic crisis arises, the expenditure adjustment is a more appropriate fiscal instrument. On medium and long terms, the taxation system of individuals is recommended to be used as control for budgetary deficits during crisis. At the same time, on medium term, the government expenditures represent also a suitable policy choice.