The Impact The Impact of Government Expenditure on Budget Deficit in Iran: Wavelet Quantile Analysis for Fiscal

Document Type : Original Article

Authors

1 member faculty of pnu

2 Phd.Economic

3 Phd. Economic

Abstract

This study was designed and implemented to investigate the impact of government spending on the budget gap in Iran and to explore the nonlinear and dynamic relationships between these two variables. For this purpose, quantile regression based on wavelet transform was used, using Haar and Dabchez wavelets. The findings of the study indicate that the impact of government spending on the budget deficit is positive and significant in all time horizons and quantiles, but the intensity of this impact depends on the time horizon and quantile under study. In addition, the aforementioned models performed better in the short-term time horizons (D1 and D2) than in the long-term time horizon (D3). Analysis of the results showed that in the short-term, government spending has a greater impact on the middle deciles of the income distribution, while in the medium and long term, these effects also extend to the middle and upper deciles of the income distribution. Tests of slope equality and quantile symmetry also confirmed the accuracy and precision of the models used. According to the results, it is suggested that short-term and long-term fiscal policies be formulated and implemented taking into account the different needs of income deciles.

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History

  • Receive Date: 15 November 2025
  • Revise Date: 06 January 2026
  • Accept Date: 10 June 2026

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