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The aim of this study is to examine the relationship between budget deficits and excise taxes revenues in OECD countries for 1999-2016 period. In the study, the bootstrap panel causality technique proposed by Kónya (2006), which considers cross-sectional dependence and heterogeneity across the countries was performed for 32 OECD member countries (Chile, Japan, Lithuania and Mexico are not included due to lack of data) yearly data of the 1999-2016 period. According to the results of the bootstrap panel causality, a significant relationship between excise tax revenue and budget deficit in OECD member countries exists. Governments due to its ease of application and general acceptance prefer excise taxes. Thus, the results can be interpreted that excise taxes are used as a revenue-increasing resource to decrease the budget deficit or to prevent increase in the budget deficit. [ABSTRACT FROM AUTHOR]

This paper discusses the political economy of budget deficits among the BRICS nations between 1997 and 2016 using a panel cointegration approach to determine the long-run relationship between economic growth, budget deficits, inflation and gross investment. The results of the study show a long-run equilibrium association among economic growth and the selected variables. Furthermore, there is a positive relationship between budget deficit, inflation, and economic growth, for the period under study for BRICS countries. Lastly, the results support the view that there is bi-directional linkage from budget deficit to economic growth and vice versa.

The aim of the paper is to analyse the irregular budget receipts, their behaviour and impact on budget deficits in Kosovo. Since its independence, Kosovo has been engaging in large infrastructure projects based mainly on initially high cash balances and overestimation of revenue capacity, in particular of irregular receipts. This led to the creation of future liabilities and budget deficits, which had to be financed by public debt. Further, the politically motivated increase of wage and salary bill and social transfers increased the burden on budget deficit already caused by infrastructure projects. Thus, budget deficits became the lasting feature of Kosovo economy. All this was supported by a lack of legal infrastructure or fiscal rules for several years. There is extensive literature on the causes of budget deficit, its definition and measurement. The literature review method is adopted in the present study, and research is refined by including selected papers that contain empirical and theoretical studies on budget deficit. Therefore, special-purpose deficit, the so-called “regular” budget deficit, which considers only regular receipts and outlays, has been defined and measured in the present study. This analysis leads to the conclusion that irregular receipts used by the government to engage in large infrastructure projects and/or the politically motivated increase of wage and salary bill and social transfers lead to a budget deficit that has to be financed through public debt. This is a case study of Kosovo and research has been carried out using primary data drawn from Kosovo budget annual financial reports. The implications of the paper may be of high importance for policymakers as well as for academic issues. This is a unique approach to the issues of Kosovo budget deficit and irregular receipts.

This study aims to reveal the relationship between budget deficits and inflation in African countries in the period of 2001 to 2020. The study utilizes Pooled Mean Group Autoregressive Disturbed Lag (PMG, ARDL) model. It is found that budget deficits have a long-run positive and statistically significant influence on the inflation rate, which emphasizes its role in deciding the price level. Similar findings are revealed for the relationship between budget deficit and labor force in the long run. Meanwhile, broad money growth findings showed both short-run and long-run impacts on the inflation rate. The empirical findings support the existence of Fiscal Theory of Price Level (FTPL) hypothesis in African context. This study offers a novel theory on the relationship between budget deficits and inflation in Africa which is characterized by a persistent inflation rate. The result supports that fiscal and monetary policy are interdependent. [ABSTRACT FROM AUTHOR]

In this brief, we review the relevant research and analyze the relationship between public sector workers, their unions and state budget deficits.

This article analyzes U.S. federal budget surpluses and deficits to better understand the USA current fiscal position and problems in an historical perspective. A long-run perspective on U.S. federal budget deficits is also helpful in understanding the deficit/debt problem. The history of US federal budget management divided into three epochs in this study. The study shows that budget deficit and debt problem especially began since the late 1970’s-third epoch- when the federal government has operated chronic and huge deficits in which usually without economic rationale.

This study revisits the Buchanan-Wagner hypothesis in reference to the deficit-spending dynamics of Turkey in the period 1924 to 2008, during which the government was expanding along with the developing national economy and democracy. The empirical analysis of the hypothesis is based on the autoregressive distributed lag approach to cointegration, which is not only quite new in the literature on the Buchanan-Wagner hypothesis but also superior to other singleequation cointegration approaches. The prevailing empirics for the Buchanan-Wagner hypothesis reveal deficiencies in several respects, as they ignore the mixed orders of integration in regressors, the endogeneity of regressors, and the encompassing dynamic structure in the short- and long-runs. Within this context, the findings of this study imply the validity of the hypothesis for Turkey, providing empirical evidence on the premise that budget deficits financed by nontax sources are the main driving force behind the continuously increasing public spending in Turkey. This evidence is argued to be a reflection of the fact that the perceived tax price of public goods and services decreases with debt-financed budget deficits over time. [ABSTRACT FROM AUTHOR]

This paper provides a review of recent developments in the theory and evidence of political determinants of budget deficits. Specifically, we discuss five areas, namely; political system, government fragmentation, ideology, budget procedure and political budget cycles. We also provide evidence of recent studies.

Aim/purpose - This paper examines the relationship between budget deficits and selected macroeconomic variables in Tanzania for the period spanning from 1966 to 2015. Design/methodology/approach - The paper uses Vector autoregression (VAR) - Vector Error Correction Model (VECM) and variance decomposition techniques. The Johansen's test is applied to examine the long run relationship among the variables under study. Findings - The Johansen's test of cointegration indicates that the variables are cointegrated and thus have a long run relationship. The results based on the VAR-VECM estimation show that real GDP and exchange rate have a negative and significant relationship with budget deficit whereas inflation, money supply and lending interest rate have a positive one. Variance decomposition results show that variances in the budget deficits are mostly explained by the real GDP, followed by inflation and real exchange rate. Research implications/limitations - Results are very indicative, but highlight the importance of containing inflation and money supply to check their effects on budget deficits over the short run and long-run periods. Also, policy recommendation calls for fiscal authorities in Tanzania to adopt efficient and effective methods of tax collection and public sector spending. Originality/value/contribution - Tanzania has been experiencing budget deficit since the 1970s and that this budget deficit has been blamed for high indebtedness, inflation and poor investment and growth. The paper contributes to the empirical debate on the causal relationship between budget deficits and macroeconomic variables by employing VAR-VECM and variance decomposition approaches.