الإيرادات العامة والنفقات العامة للاقتصاد الليبي: دراسة تطبيقية لتحليل طبيعة العلاقة بينهما وتحديد اتجاهها

Abstract EN

The study aims to determine the causal relationship between public expenditure and revenue for Libyan economy and identify its nature for the time period from 1984 to 2018, by using some statistical techniques such as Johannsen cointegration test, vector error correction model, and lastly granger causality test.

results of the study confirm that there is a positive relationship between public revenues and public expenditure in the long term, while no significant impact is witnessed expenditure to public revenue.

moreover, the causal test also emphasizes that a direction of a relationship between the two variables is only a unidirectional causality runs from public revenue to public expenditures in long-run.

these results support an assumption of public revenue causes public expenditures.

this an assumption is also confirmed by VECM test when it finds an existence of only a unidirectional causality runs from public revenue to public expenditures in short-run.

in other words, an increase in public spending is achieved only through increasing public revenues.

due to government's limited revenues, it will resort to borrowing to cover its expenses, which leads to generate continuous financial deficits resulting in high levels of public debt.

therefore, the government should adopt new economic policies that rationalize its public spending, as well as to creating investment fields that raise the public revenues, and searching for new financial resources, and reforming its tax system.