Assessment of Budget Sustainability in Sarawak
This study reexamines the sustainability of budget stance of Sarawak state, 1970-2008. Using the intertemporal borrowing constraint as a framework, the study tests the long-run relationship between government revenue and expenditure. Empirical results demonstrate a long-run equilibrium relationsh...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Asian Economic and Social Society
2012
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/7315/ http://ir.unimas.my/id/eprint/7315/1/ASSESSMENT%20OF%20BUDGET%20SUSTAINABILITY%20IN%20SARAWAK.pdf |
| Summary: | This study reexamines the sustainability of budget stance of Sarawak state, 1970-2008. Using the
intertemporal borrowing constraint as a framework, the study tests the long-run relationship
between government revenue and expenditure. Empirical results demonstrate a long-run
equilibrium relationship among the variables. The cointegration test result suggests that Sarawak state’s fiscal stance satisfies the weak sustainability condition. In addition, the Granger causality test result reveals a bi-directional relationship between government revenue and expenditure. This means that fiscal authorities made simultaneous decisions on expenditure and revenue. Government revenue and expenditure will mutually reinforce each other. |
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