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This study examines causality shifts in the revenue–expenditure nexus in Brazil during the years 1996–2019. The literature usually assumed a time-invariant causality link between government revenues and expenditures. Such assumption becomes often implausible when the sample period covers significant economic, political and policy changes, like the case of Brazil in the last two decades. Based on time-varying Granger causality tests, we found three distinct causality episodes: fiscal synchronization in 2005–2008, spend-and-tax in 2010–2013, and a tax-and-spend in 2015–2018. These episodes are intercalated with periods of no causality that coincides with economic crisis, political turmoil and major shifts in fiscal policy. The findings suggest that the interplay between fiscal policy orientation and primary surplus targeting is an important factor in the revenue–expenditure nexus. The most recent causality episode suggests stronger effects running from revenues to expenditures in the Brazilian primary budget dynamics. In this context, according to the tax-and-spend hypothesis, cutting spending seems to be the right course of action to restore fiscal balance in Brazil. A tax increase should be considered with caution because it may only incentive the government to grow its expenditures. [ABSTRACT FROM AUTHOR]

The Fiscal Responsibility Law (LRF) seeks, in its core, to imprint austerity in the effectuation of public spending. Its purpose is balancing public spending by imprinting in its context a new fiscal perspective. This article applies a change to the methodology proposed by De Jesus Macedo and Corbari (2009) to evaluate the effects of LRF on municipal indebtedness, based on data from the towns of the state of Piauí. Given that the LRF was implemented in 2000, the aim of this article is checking whether there was a change in the municipal indebtedness since this law was implemented. The study suggests that the towns in Piauí reduced their debt by about 7% after the implementation of LRF. [ABSTRACT FROM AUTHOR]

Copyright of Brazilian Journal of Applied Economics / Economía Aplicada is the property of FEA-RP, Universidade de Sao Paulo and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines fiscal sustainability in Latin American countries from a unique time–frequency perspective, focusing on Brazil, Chile, Colombia, Peru, and Mexico from 1997 to 2022. Using wavelet coherence analysis, it uncovers dynamic relationships between government revenue and expenditure over different time horizons, revealing varying causality patterns across countries and periods. The findings underscore the importance of balanced fiscal planning and resource allocation to ensure fiscal sustainability and support economic growth. This research contributes to a deeper understanding of Latin America's economic landscape and provides valuable insights for policymakers, economists, and stakeholders concerned with the region's economic stability and development. [ABSTRACT FROM AUTHOR]

Whether to increase taxes or cut spending is an important question with profound policy implications, especially as countries attempt to deal with the consequences of the COVID-19 pandemic. This study, therefore, investigated the relationship between revenues and spending in the Southern African Development Community (SADC), where concerns about rising debt and deficits were raised prior to the pandemic. A panel bootstrap Granger-causality technique was used to analyze annual frequency data covering the 1980–2018 period. To our best knowledge, this was the first study in Africa to simultaneously account for cross-country differences and cross-section dependence. The findings of the study have in-depth implications for fiscal policy and adjustments towards budgetary equilibria. The study found no evidence of causality between revenues and spending in eleven SADC member states, suggesting that to balance their respective budgets, governments in these countries can alter either spending or revenues, or both. However, in Botswana, we found evidence of the tax-spend hypothesis, implying that governments should consider altering revenues to eliminate budget imbalances. Finally, evidence of the spend-tax hypothesis was found in Mauritius and Mozambique, suggesting that past and current expenditures drive revenues in these countries. Accordingly, cutting spending would be an ideal policy recourse to deal with budgetary disequilibrium. [ABSTRACT FROM AUTHOR]

Copyright of Brazilian Business Law Journal / Administração de Empresas em Revista is the property of Administracao de Empresas em Revista and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)