Table 4 presents the estimates of the long-run coefficient for the variables entering the cointegrating vector. Thelong-run estimates should provide evidence for the co-movement between fiscal categories from both sides of thebudget. We base our inferences on the mean-group Fully Modified OLS estimator (FMOLS) proposed by Pedroni(2000), which corrects the standard OLS for the bias induced by the endogeneity and serial correlation of theregressors. It also allows for heterogeneous cointegrating elasticities and more flexible hypotheses testing than thepooled FMOLS estimator. The cointegrating vector is again normalised on the revenue category.
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