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A simple two‐country model with trade, fiscal and interest rate externalities is used to study strategic interactions between national policymakers. Optimal fiscal policy internalizes a trade‐off between output stability and fiscal stability. With lump‐sum taxation, the noncooperative equilibrium is inefficient and both countries are better off under coordination. These results also hold if taxation is distortionary and trade generates a fiscal externality as well, regardless of how strong the preference for output stability is. In response to a negative global demand shock, consistent with the disruptions that occurred during the recent pandemic, the optimal policy response is to increase spending by more under cooperation. However, if budget deficits generate a sufficiently strong negative cross‐border externality through higher interest rates, the optimal response calls for lower spending under cooperation. [ABSTRACT FROM AUTHOR]

Using a two-step approach GMM, this study examines the short- and long-term effects of fiscal deficit on the economic growth of 42 Sub-Saharan African nations between 2011 and 2021. The World Development Index, the most reliable source, is where the panel data is taken from. Using the Levin-Lin-Chu and Hadri LM tests for unit root, it was determined that there is no risk of a random walk in the data. The study's findings indicate that while the fiscal deficit has short-term, positive, and significant benefits on the economic growth of SSA countries, it has long-term, negative repercussions. According to the system GMM's results, an increase in the fiscal deficit of SSA countries is linked to a short-term increase in economic growth of 0.036 percent, while an increase in the fiscal deficit of one percentage point is linked to a long-term decline in economic growth of SSA countries of 0.013 percent, holding all other factors constant. The study's findings also showed that the budget deficit has a larger positive short-run coefficient than a negative long-run coefficient. The study also revealed that while real effective exchange rates and inflation short-term hinder economic growth, gross fixed capital creation and real interest rates are the primary drivers of economic expansion. Long-term economic growth in the SSA countries is also found to be positively and significantly impacted by gross fixed capital formation. According to the study, SSA nations should manage their fiscal deficits and, in the long run, provide more funds for gross fixed capital development. [ABSTRACT FROM AUTHOR]

When Congress is highly polarized and closely divided between the two parties, the majority party will often lack the votes to overcome a Senate filibuster on controversial matters. Majorities have tried to circumvent the filibuster by using the budget reconciliation process--which allows a simple-majority to close debate and move to a final vote--to make major policy on topics ranging from immigration to labor to climate. These efforts sometimes fail on account of the Byrd rule, a rule of legislative procedure that serves as a gatekeeper for the reconciliation process. The most important part of the rule is brief and somewhat cryptic, providing that a provision violates the rule and can be struck from a reconciliation bill if the provision "produces changes in outlays or revenues which are merely incidental to the nonbudgetary components of the provision." This Article excavates and critically examines the body of law that implements this provision of the Byrd rule. First, a key part of the Byrd rule inquiry is an allthings- considered balancing of a provision's budgetary effects as compared to its policy effects. Second, the Senate parliamentarian's office, which administers the Byrd rule, has developed other principles to implement the rule. The office is more likely to find consistent with the rule provisions that, for example, involve direct rather than indirect budgetary impacts, do not impose mandates on private parties, do not target particular entities, and do not concern certain substantive topics. Third, precedent plays a significant role in the Byrd rule inquiry: past decisions carry great weight, though the parliamentarian's office may narrow or depart from precedent in rare but important cases. Recently published materials and original interviews with Senate staffers reveal how these decisional rules shape the operation of the Byrd rule in practice. In addition to its descriptive contribution, this Article also subjects each aspect of Byrd rule doctrine to critical analysis. Some aspects of the doctrine stem naturally from the text of the rule, further a plausible purpose, and are sensible ways of implementing the rule's open-ended language. Other aspects of the doctrine risk being over- or under-inclusive relative to the plausible purposes of the Byrd rule, generate internal tensions in the doctrine, or can give rise to gamesmanship by the parties. But normatively evaluating Byrd rule doctrine on the whole is challenging because there is no present consensus about the rule's purpose, given that doctrine departed from the rule's initial goal of promoting deficit reduction efforts more than two decades ago. Understanding how the Byrd rule works on the ground holds important lessons for the operation of the contemporary Congress, the development of an underappreciated area of law, and the content of public policy. [ABSTRACT FROM AUTHOR]

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 article assesses the long-run intertemporal sustainability of the current account deficit in India for the period 1974–2018. We employ various linear and non-linear models, such as the Johansen cointegration test, the non-linear autoregressive distributed lag (ARDL), threshold autoregression (TAR) and momentum autoregression (MTAR) models, to validate the intertemporal budget constraint. The results of the linear cointegration test reveal no cointegration between exports and imports, plus interest payment on external debt. Results from non-linear models, however, provide evidence of cointegration between the variables, implying that the intertemporal budget constraint is validated. The estimates of the TAR model reveal that the current account disequilibrium adjustment process towards the long-run equilibrium follows an asymmetric pattern. Results of the non-linear ARDL model further show that, in the long run, exports react differently to positive and negative changes in imports. Overall, our results show the presence of asymmetries in the current account adjustment process. The estimated cointegrating vector suggests that the current account deficit exhibits weak sustainability. From a policy perspective, the findings recommend implementing suitable macroeconomic and trade policies to reduce the current account deficit. JEL Codes: C30, D90, F32, F34, F40 [ABSTRACT FROM AUTHOR]

A smooth operation of the public budget requires simultaneous growth of macro-fiscal instruments. In this background, the study intends to estimate the macro-fiscal determinants of the public budget in the North-Eastern states (NES). The percentage estimation of fiscal capacity, fiscal dependency and revenue base depicts an overall fiscal conundrum in the NES. The empirical estimation procedure begins with the unit root test, followed by a Pedroni cointegration test, followed by the fully modified least square and the dynamic least square model to estimate the degree of relationship. Two series have been estimated to avoid multicollinearity. The results depict a cointegration between the macro-fiscal instruments (total government expenditure, state's own revenue (SOR), gross state domestic product (GSDP), grants (GR), gross fiscal deficit (GFD) and revenue deficit (RD)). The results show that the SOR, GSDP and GR are the positive and significant determinants of government expenditure. On the other hand, GFD is a positive yet insignificant determinant of government expenditure. RD is a negative and significant determinant of government expenditure. This implies that a stronger revenue generation capacity could result in augmenting the public budget for the efficient provision of public services. JEL Codes: E62, H1, H50, H62, H71, H72 [ABSTRACT FROM AUTHOR]

This study aims to find out how the impact felt by the community after the implementation of the VAT rate increase policy on individuals who act as end consumers, and business actors or MSMEs who act as distributors. The method used in the study is a Systematic Literature Review (SLR) from various studies on the impact and implications of VAT rate increases in Indonesia. The results of the study show that VAT affects the price of goods and services in the market, increases production costs and selling prices, and worsens inflation. However, the increase in VAT rates can also increase government tax revenues, reduce the budget deficit, and stabilize the country's fiscal condition. In addition, the increase in VAT can affect consumer behaviour and business investment, especially in the manufacturing, trade, and service industry sectors. [ABSTRACT FROM AUTHOR]

The US has reached a crisis stage regarding mounting sovereign debt, but a change of mindset and adoption of practical solutions can restore the nation to fiscal health. Unless actions are taken now to change the trajectories, deficits and debt are anticipated to enlarge over the coming decades with an aging population boosting spending, increasing debt service, and insufficient revenues. While there is no silver bullet, there are myriad policy actions that can cut deficits, lower debt to a sustainable level, reduce financial stability risks, and support US economic growth over the long run. Moreover, focusing upon lowering debt over a 20- or 30-year horizon instead of the typical 10-year CBO forecasting period can help rein in federal debt without significant damage to the economy. [ABSTRACT FROM AUTHOR]

The article discusses the recent surge in inflation and predicts that inflation rates in the G7 countries will continue to fall to 2% or lower in 2024-2025. The inflationary pressure was caused by a combination of wartime-style fiscal and monetary policies and pandemic-related distortions to product and labor markets. However, these sources of inflationary pressure are now receding. The article also highlights the importance of monitoring fiscal deficits, monetary growth, credit conditions, labor markets, and supply disruptions as indicators of future inflation trends. The analysis suggests that policy divergence may occur among the G7 economies, with the US indicators looking stronger than in Europe. Overall, the article concludes that the 'wartime' characteristics of recent inflation are fading, and further declines in inflation are likely. [Extracted from the article]

This paper identifies how a rise in the deficit/debt impacts interest rates by looking at the high‐frequency response of interest rates to fiscal surprises. The fiscal surprises are the unexpected components of deficit releases and the changes in official forecasts by the Congressional Budget Office and by the Office of Management and Budget. The paper estimates that a rise in the deficit‐to‐GDP ratio of 1 percentage point raises the 10‐year nominal interest rate by 8.1 basis points. The response is similar quantitatively for other Treasury maturities and for corporate debt interest rates. The paper also investigates which theoretical channel drives this relationship, and whether surprises affect interest rate expectations or the term premium. These results are used to estimate how recent spending may have affected interest rates. This paper is part of the Economica 100 Series. Economica, the LSE "house journal" is now 100 years old. To commemorate this achievement, we are publishing 100 papers by former students, as well as current and former faculty. Christopher David Cotton obtained his BSc from the LSE. [ABSTRACT FROM AUTHOR]

This article provides an overview of the macroeconomic challenges facing the 10 countries in the Association of Southeast Asian Nations (ASEAN). It discusses various macroeconomic indicators and the importance of achieving high levels of economic growth. The article also explores ASEAN's participation in Regional Value Chains (RVCs) and Global Value Chains (GVCs), particularly in the automotive and electronics industries. It examines the adoption of inflation targeting frameworks by ASEAN countries and evaluates their macroeconomic performance. The text further analyzes the fiscal sustainability of Indonesia, Malaysia, and Thailand, providing policy recommendations to enhance revenue collection and reduce subsidies. It also discusses the challenges faced by Vietnam's economy and suggests policy measures to overcome them. The article touches on economic issues in Cambodia and Laos, including technology spillovers, Central Bank Digital Currency (CBDC) implementation, and financial system reform. The perspectives presented offer insights into these countries' economic situations and potential policy measures. [Extracted from the article]

This paper investigates fiscal sustainability in Indonesia and draws comparisons with Malaysia and Thailand. The analysis encompasses an evaluation of fiscal rules, fiscal performance, and an assessment of fiscal sustainability across these three countries. Given that the Coronavirus Disease (COVID‐19) pandemic affected budget deficits in each country starting in 2020, the empirical assessment utilizes data from 2010 to 2019. Despite persistent fiscal deficits in each country, the results suggest that all three countries maintain fiscal sustainability. A more detailed analysis of the Indonesian case focuses on government revenue and expenditure. The discussion addresses challenges in these areas, aiming to identify feasible policy options for enhancing fiscal sustainability in Indonesia. [ABSTRACT FROM AUTHOR]

Tax regulation issues have been the focus since the COVID-19 crisis and the subsequent EU energy crisis. From the Keynesian approach, the expansionary fiscal policy of states can contribute to stimulating aggregate demand and, as a consequence, economic growth, on the other hand, the post-crisis macroeconomic policy trend has become fiscal compression (budget consolidation), corresponding to the neoliberal paradigm. This policy has been actively promoted by the supranational institutions of EU, which, with the help of various instruments of fiscal regulation, have effectively imposed budgetary consolidation on member countries. Considering that the European Commission continues to urge countries to better the sustainability of their public finances and believes that the situation with the tax system is only safe in some EU countries, while in others it finds significant imbalances, particularly high levels of public debt, which need to be corrected by the Stability and Growth Pact mechanisms, the relevance of this study is beyond doubt. [ABSTRACT FROM AUTHOR]

This study aims to examine the budget deficit–inflation relationship, considering financial sector development and broad money supply as moderating and mediating variables. For this purpose, a panel data set ranging from polled mean group, mean group, and dynamic fixed effect estimation techniques are employed. Hence, the pooled mean group estimation result reveals that the budget deficit is inflationary. In addition, GDP per capita, the effective exchange rate, financial sector development, regulatory quality, and the interaction term of the budget deficit and financial sector development are significant determinants of inflation. The study further examines the role of the broad money supply as a mediating variable in the budget deficit–inflation relationship. The structural equation model results and the mediation effect tests confirmed a partial mediation effect of the broad money supply on the budget deficit–inflation relationship. Based on the findings, it is recommended to strengthen regulatory quality, reduce broad money supply, and improve financial sector development. By doing so, we can create a more stable and efficient economy that benefits everyone in the long run. [ABSTRACT FROM AUTHOR]

The fiscal balance is an indicator of the health of public finances and a result of the fiscal policy that differs from one state to another, even in similar macroeconomic conditions. Especially after the Covid-19 crisis which showed that governments need a more permissive fiscal space for adjustments and a good knowledge of the fiscal vulnerabilities to which they are exposed, budget deficit or surplus can be used as a tool to measure fiscal risk or fiscal security, respectively. Based on data from Eurostat and World Bank databases, our analysis concerns the current 27 European Union member states between 2000 and 2021. Our study demonstrates that general government debt, foreign direct investments, military and unemployment expenditures negatively impact the budget balance, while economic growth and pension expenditures are revealed as positive determinants of the budget balance. Considering the calculated coefficients, economic growth stands out as the most important source of competing fiscal risks and improving budget balance, proved by all the statistical methodologies employed in the study. [ABSTRACT FROM AUTHOR]

We revisit the twin deficits hypothesis (budget and trade deficits) for the United States during 1791–2019, using the system-equation ADL test for threshold cointegration proposed by Li (2017). This model can demonstrate the existence of both asymmetric adjustment and asymmetric role in the relationship between trade and budget deficits. Our empirical evidence suggests a nonlinear long-run relationship between the two variables, thus finding the presence of the twin deficits hypothesis. Further, we find time–varying cointegration between the two, and an asymmetric adjustment process. Budget deficits play a vital adjustment role at low regimes (when error-correction terms are below the threshold of 1.11), and trade deficits play an important adjustment role at higher regimes (when error-correction terms are above the threshold of 1.11). [ABSTRACT FROM AUTHOR]

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This research aims to explore the fiscal and public finance viability on climate physical risk externalities cost for building social-economic-environmental sustainability. It analyzes climate physical risk impact on the real business cycle to change the macroeconomic output functions, its regressive cyclic impact alters tax revenue income and public expenditure function; This research also analyzes that the climate physical risk escalates social-economic inequality and change fiscal-financial policy functions, illustrates how the climate damage cost and adaptation cost distorts fiscal-finance cyclical and structural equilibrium function. This research uses binary and multinomial logistic regression analysis, dynamic stochastic general equilibrium method (DSGE) and Bayesian estimation model. Based on the climate disaster compensation scenarios, damage cost and adaptation cost, analyzing the increased public expenditure and reduced revenue income, demonstrates how climate physical risk externalities generate binary regression to financial fiscal equilibrium, trigger structural and cyclical public budgetary deficit and fiscal cliff. This research explores counterfactual balancing measures to compensate the fiscal deficit from climate physical risk: effectively allocating resources and conducting the financial fiscal intervention, building greening fiscal financial system for creating climate fiscal space. [ABSTRACT FROM AUTHOR]

This paper aims highlighting the importance of maintaining long-term sustainability of public finances through the continuation of measures for economic recovery, accelerating economic growth, and maintaining and supporting a new framework for sustainable development that leads to the elimination of vulnerabilities in the economy and ensures a decent standard of living. The main objectives for creating and consolidating public finances aim at improving the quality of public spending by improving budget planning, implementing reforms in the labor, pension, and SME support sectors, prioritizing sectoral policies, ensuring real competition between proposed projects for funding, and supporting performance by using the best practices at the European level and avoiding wastage of public funds. The paper analyzes the degree of fiscal consolidation achieved, contributing to reducing inflation, interest rates, the trade deficit, and the current account deficit of the balance of payments, as well as the stability of the leu exchange rate, taking into account the fragility of the domestic and external environment, the budgetary effort required for the new pension system law, and the implementation of reforms from the PNRR, which must be completed by 2026. Considering the issues mentioned above, Romania has set several objectives to ensure the sustainability of the gross financing needs, such as reducing the budget deficit by supporting and adapting the business environment to the challenges posed by economic crises, simplifying taxation, and improving legislation to address tax evasion, to create the conditions for healthy and sustainable economic growth. [ABSTRACT FROM AUTHOR]

Examining Iran's economic developments over the past five decades shows that Iran's economy has always had a high inflation rate. Therefore, it is very important to investigate the factors affecting inflation in the country. The purpose of this research is to investigate the relationship between macroeconomic variables including liquidity, monetary base, oil revenues, budget deficit, economic growth and inflation rate in Iran in the period of 1991-2020. For this purpose, the combination of two approaches of maximum overlap discrete wavelet-Granger causality and wavelet coherence based on the continuous wavelet approach has been used. The advantage of using the wavelet approach is that it allows the analysis of variables in two dimensions of time and frequency. The results of the analysis of both approaches showed that in the short term, oil revenues increase inflation. The results of the long-term research showed that the inflation rate increases the growth of liquidity. Finally, in the long term, oil revenues have been the cause of inflation, and in the short term, the inflation rate has been a factor affecting the growth rate of the budget deficit. Analyzing the phase difference in the time series of economic growth and inflation shows that in the long-term economic growth with oil and inflation are out of phase. In other words, economic growth with oil and inflation does not move in the same direction. [ABSTRACT FROM AUTHOR]

Purpose: This study examines the association between geopolitical risk (GPR) and corporate tax, which is a major source of revenue for the government and a significant explicit cost for firms. The authors use a comprehensive measure of GPR to study its effects on corporate taxes by using an international sample. Design/methodology/approach: The authors adopt the geopolitical measure constructed by Caldara and Iacoviello (2022) as a proxy for GPR and cash-effective tax rate benchmarked with statutory tax rate to measure corporate tax avoidance. The authors employ panel regression with fixed effects (FEs) to investigate the impact of GPR on corporate tax avoidance. The authors also conduct a battery of robustness tests to ensure the strength of the study's results. Findings: This study's empirical results indicate that sample firms increase their tax avoidance amid increasing GPR. Further analyses show that financial constraints incentivize firms to avoid taxes during rising geopolitical tensions. The authors also provide evidence on the role of firm-level and country-level governance in weakening the association between GPR and tax avoidance. Practical implications: Policymakers and governments may strengthen the enforcement rule to limit aggressive tax practices of corporates during GPR to balance fiscal deficit. In addition, this study sheds light on the debate among administrators and politicians over the efficacy of current tax laws and governance structures in the presence of heightened GPR. Originality/value: The authors extend the literature on GPR by analyzing its effect on corporate tax avoidance. Unlike existing single-country studies, the authors use a cross-country setup to investigate the impact of GPR on tax avoidance, making this study's results more generalizable as the authors control for a host of country, industry, and time factors. Apart from political uncertainty, terrorism, and climatic issues, the authors document GPR as a strong macroeconomic driver of corporate tax avoidance. The authors make a new contribution to the literature on the moderating role of governance and institutional factors on the association between tax avoidance and GPR in an international context. The authors also contribute to the literature on macroeconomic determinants of tax avoidance. [ABSTRACT FROM AUTHOR]

Existing literature suggests that fiscal space matters for the policy response to financial crises. High public debt levels limit countries capacity to pursue macroeconomic and financial stabilization policies and resume growth after severe crisis downturns. We examine the involved channels through which fiscal space matters for the dynamics of fiscal policy after a financial distress, namely sovereign market access and policymakers' views, in a panel of 30 OECD countries for the period 1980–2017. We introduce a non-linear measure of fiscal space, which further considers simultaneously both the debt-to-GDP ratio capturing long-term features of countries' policy-making processes and budgetary balances that capture recent policy decisions and persistent fiscal deficits. We document a substantially strengthened role for sovereign market access constraints in driving the policy response to distress once fiscal space non-linearity is introduced in the model, which highlights the non-linearity involved in market participants' concerns about fiscal space. Moreover, the vulnerability of market access concerning fiscal space is affected by either the debt-to-GDP ratio or fiscal balances dominating the assessment of fiscal space. The role of fiscal health and the policymakers' views channel is more pronounced once flows of budget deficits are at the epicenter of the assessment of fiscal space, suggesting a "deficit concerns" channel. [ABSTRACT FROM AUTHOR]

The post-Covid-19 global economic landscape has yielded complex challenges. Given bleaker global growth prospects, moderating commodity prices and a higher cost of borrowing, the Indonesian government took a conservative approach to fiscal policy by narrowing the budget deficit to ease the financing pressures. Meanwhile, the central bank, Bank Indonesia, implemented contractionary monetary policy by raising the reserve requirement and policy rates. Weaker global demand, along with limited policy support, contributed to a decrease in economic growth, from 5.3% in 2022 to 5.0% in 2023. The government's conservative approach in 2023 helped produce a surplus in the primary balance, a narrower budget deficit and a lower government–debt ratio. Nonetheless, much is to be done, as more development is needed to encourage long-term growth while revenue collection has been relatively low. Improvement in tax policy and administration will be crucial to allow the government to collect more revenue, including a comprehensive review of tax incentives and exemptions. The efficacy of spending also needs to be further improved by consistently reforming energy subsidisation, reallocating spending to growth areas, better aligning local development policies with the national position, and better targeting poverty-alleviation programs. [ABSTRACT FROM AUTHOR]

The full-scale military invasion of the Russian Federation on the territory of sovereign Ukraine has led to the emergence of a number of destabilizing factors in the development of the Ukrainian economy. Moreover, it has caused the increase of macroeconomic instability and problems of a social - economic nature, which requires an immediate solution and development of forecasts of economic and social development. The purpose of the research is to forecast macroeconomic indicators of the economy development of Ukraine during the war (2022--2023). The forecasting results give evidence of the critical and threatening values of the analysed macroeconomic indicators of the Ukrainian economy development in war conditions. This causes a decrease in the life quality of the population and the sustainable competitiveness of the country and requires the formation and implementation of an effective macroeconomic policy. The substantiated influence of macroeconomic indicators on the level of life quality of the population indicates a strong interrelationship between the analysed indicators (R=0,933). The budget deficit in 2024 is forecast at the level of -2,7%; the GDP volume will decrease to 5,8%; the poverty level will increase to 62%, and the unemployment rate will increase to 33%. [ABSTRACT FROM AUTHOR]

This paper empirically and theoretically investigates the relationship between budget balances and external balances, the so-called twin deficit hypothesis. Using the US post-World War II data, I estimate a time-varying structural vector autoregressive model to evaluate the effects of structural breaks on this relationship. The empirical results reveal that the relationship is significantly time varying: (1) an increase in government spending and the consequent budget deficits tend to cause trade deficits in the Bretton Woods era; (2) in contrast, an increase in government spending tends to induce trade surpluses in the post-Bretton Woods era; and (3) with the exceptions of the 1980s and 2010s, government spending shocks cause trade deficits under a floating exchange regime. Using the open economy New Keynesian model with rule-of-thumb consumers, I find that a shift in exchange rate regimes helps in understanding empirical results (1) and (2). Moreover, slowly adjusted taxes inform our comprehension of exceptions in the 1980s, whereas zero lower bound aids our explanation of exceptions in the 2010s. [ABSTRACT FROM AUTHOR]

The author reflects on Rachel Reeves making history as the first female Chancellor of the Exchequer in the United Kingdom (UK) following the Labour Party's landslide victory in the 2024 general election. Topics include the historical context of women in British Parliament, the progress of female representation and achievements over the decades, and the current challenges facing the new government, including a significant economic deficit and the ongoing need for gender equality in politics.

The Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) offers tens of millions of American beneficiaries a crucial lifeline. This welfare benefit has been associated with better nutritional outcomes and has been linked to an efficient tool to fight hunger, improve labour market outcomes for the beneficiaries, achieve higher birth weight for children born to the beneficiary mothers, improve height and health outcomes for the beneficiaries. SNAP has been found to be an essential tool to ensure the availability of vital resources during times of need, etc. Despite the program's numerous advantages, serious doubts exist about its viability and stability of the program especially, given the steep rise in program costs over the years. Over the past 50 years, SNAP has experienced tremendous growth both in terms of the number of beneficiaries and amount of spending. From over $1.82 billion in 1969 to over $113 billion in 2022, the total cost of the SNAP initiative has increased over 62 times in 53 years. This research uses data from the US Department of Agriculture to investigate the time series properties in the rise in the total expenditure devoted to the SNAP between 1969 and 2022. With and without trends, Augmented Dickey-Fuller tests are run with carefully chosen lag lengths. The existence of a unit root cannot be rejected in all specifications pointing to the possibility that the program might have grown in an unstable manner over time. An overwhelming amount of evidence points to an unstable and unstable growth in the overall amount spent on SNAP recipients. This unchecked growth may present substantial difficulties for policymakers especially since the program competes with other welfare programs in an environment of rapidly rising national debt and persistent budget deficits. The report does not attempt to estimate program fraud or abuse which may partially contribute to higher expenditures.

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 single-equation 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 debtfinanced budget deficits over time.