Assessment of Budget Sustainability in Sarawak

Lau, Evan and Puah, Chin-Hong and Teo, Hui-Fern (2012) Assessment of Budget Sustainability in Sarawak. Asian Economic and Financial Review, 2 (8). pp. 952-965. ISSN 2222-6737 (online). 2305-2147 (print)

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Abstract

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.

Item Type: Article
Uncontrolled Keywords: Fiscal Sustainability, Cointegration, Revenue, Expenditure, GDP and Sarawak, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 05 May 2015 06:37
Last Modified: 14 Apr 2016 07:01
URI: http://ir.unimas.my/id/eprint/7315

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