According to the important role of governments in economic development and the interrelationships between government's fiscal policies with economic growth and inflation rate, especially in developing countries such as Iran, and based on previous theoretical studies, the main purpose of this study is to investigate the causal relationships between fiscal policies (tax revenues and government expenditures) with economic growth and inflation rate in the provinces of Iran during 2009-2021 applying Domitrescu-Horlin causality test. The results indicate that there is a two-way causality between taxes and government expenditures, a two-way causality between taxes and economic growth, no causality between government expenditures and economic growth, a one-way causality from inflation rate to taxes, a two-way causality between government expenditures and inflation, and a one-way causality from inflation to economic growth. Based on the results, it is suggested that the government create a suitable and efficient tax system and also make changes in its expenditures in order to help reduce the inflation rate and affect the budget deficit.
