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Public revenue, fiscal deficit and economic growth: Evidence from Asian countries

Journal of Economics and Political Economy

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Title Public revenue, fiscal deficit and economic growth: Evidence from Asian countries
 
Creator AMGAIN, Jeeban; Graduate School of Economics, Kobe University
DHAKAL, Nanda Kumar; Nepal Rastra Bank, Kathmandu, Nepal
Central Office, Baluwatar, Kathmandu, Nepal
Email: dhakalnk@gmail.com
 
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Description Abstract. This paper examines the impact of public revenue and fiscal deficit on economic growth in 20 Asian Countries. We use panel Autoregressive Distributed Lag Model (ARDL) to estimate both the short-run and long-run impact of the fiscal variables. The results indicate that fiscal deficit adversely affect growth both in short-run and long-run. In the long-run, deficit finance leads to debt accumulation which is also negatively associated with growth. However, panel ARDL results show that revenue is positively associated with growth in the long-run. In absence of fiscal deficit, public revenue influences positively on growth in the long-run. The impact of revenue in the short-run is not significant. The findings have important policy implication in fiscal sector reform. As the developing countries in Asia are more dependent on fiscal deficit, special care has to be taken in raising public revenue to ensure desirable results. The research suggests that in the case of Asian countries where revenue level is already low and deficit is persistent, raising revenue would reduce the debt level, contributing to higher growth.Keywords. Fiscal deficit; revenue; economic growth; investment; panel ARDL.JEL. E60, H60, O40.
 
Publisher Journal of Economics and Political Economy
Journal of Economics and Political Economy
 
Contributor —
 
Date 2017-12-28
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEPE/article/view/1482
10.1453/jepe.v4i4.1482
 
Source Journal of Economics and Political Economy; Vol 4, No 4 (2017): December; 329-342
Journal of Economics and Political Economy; Vol 4, No 4 (2017): December; 329-342
2148-8347
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEPE/article/view/1482/1467
http://www.kspjournals.org/index.php/JEPE/article/downloadSuppFile/1482/740
 
Rights Copyright (c) 2018 Journal of Economics and Political Economy
http://creativecommons.org/licenses/by-nc/4.0