ABSTRACT
An understanding of the intertemporal links between taxing and spending is of obvious importance in order: (i) to evaluate how different policies might, or might not, help to reduce the public deficit and (ii) from a theoretical point of view, to evaluate on an empirical basis the capacity of various theories to cope with reality. Of course, temporal causality tests do not verify theories directly, but they do allow us to reject them if causality goes in the wrong direction.
