Abstract

The main purpose of this paper is to examine the relationship between government revenue and expenditure in Qatar. Annual data for the period from 1980-2011 were used and a time series analysis of unit root tests, Engle-Granger’s cointegration and Granger causality were applied. The paper found that variables were integrated of order one when Augmented Dickey-Fuller and Phillip-Perron unit root tests were employed. The variables were found to be cointegrated. Empirical results found unidirectional causality that runs from government revenue to expenditure in support of revenue-spend hypothesis.

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