A longer-run perspective on fiscal sustainability

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ID: 266168
2013
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Abstract
We investigate the sustainability of fiscal policy in a set of 19 countries by taking a longer-run secular perspective over the period 1880–2009. Via a systematic analysis of the stationarity of the first-differenced level of government debt, and disentangling the components of the debt series using structural time series models, we conclude that since in most cases non-stationarity can be rejected, longer-run fiscal sustainability is not rejected (Japan and Spain can be exceptions). The same is true for a panel analysis when allowing for multiple structural breaks, and for cross-country dependence. In addition, endogenously identified breaks can be related to episodes of sovereign default.
Reference Key
afonso2013empiricaa Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors António Afonso;João Tovar Jalles;António Afonso;João Tovar Jalles;
Journal empirica
Year 2013
DOI
doi:10.1007/s10663-013-9240-0
URL
https://dx.doi.org/10.1007/s10663-013-9240-0
Keywords
public finance econometrics industrial organization international economics european integration macroeconomics/monetary economics//financial economics

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