Search results for "Public debt sustainability"
showing 4 items of 4 documents
Does politics matter in the conduct of fiscal policy? Political determinants of the fiscal sustainability: Evidence from seven individual Central and…
2007
This paper aims at assessing the fiscal sustainability and its political determinants in seven Central and Eastern European Countries (CEEC), namely Estonia, Latvia, Lithuania, Poland, Slovenia, Slovakia and the Czech Republic. First, using the recent sustainability approach of Bohn (1998) based on fiscal reaction function, econometric findings using Ordinary Least Squares (OLS) reveal a positive response of the primary surplus to changes in debt in several countries. In other words, fiscal policy is sustainable in Baltic countries, Slovenia and Slovakia, but not in Poland and in the Czech Republic. Second, by introducing political dummy variables, we test the electoral budget cycle and the…
A wavelet analysis of US fiscal sustainability
2015
Abstract In this paper, we reassess the relationship between primary deficit and lagged debt to GDP ratio (Bohn, 1998), to test for US debt sustainability over the period 1795–2012. Our analysis is rooted in the wavelet domain enabling the detection of interesting patterns and otherwise hidden information. We find evidence of long term fiscal sustainability but only up until 1995 and also we show that governments tend to respond more vigorously to budget deficits when the level of debt is high rather than low.
Testing for public debt sustainability using band spectrum regression analysis "
2014
In this note we focus on the response of the primary surplus to debt (ratios to GDP)over a low frequency band (associated with cycles with period between eight and sixteen years) to filter out business cycle effects. For this purpose, we use band spectrum regression, using both the Fourier Transform and the Discrete Wavelet transform, fitted to pooled panel dataset of 18 EMU countries. The empirical findings give evidence of fiscal fatigue within Eurozone:the response of primary surplus to debt will decrease over a finite debt limit.
Political determinants of the fiscal sustainability: evidence from six individual developed countries.
2007
This paper aims at assessing the fiscal sustainability and its political determinants in six countries, namely France, Germany, Greece, Italy, the United Kingdom, the United States. First, using the recent sustainability approach of Bohn (1998) based on fiscal reaction function, econometric findings using OLS reveal a positive response of the primary surplus to changes in debt in several countries. In other words, fiscal policy is sustainable in France, Italy, the United Kingdom, the United States, but not in Germany and Greece. Second, by introducing political dummy variables, we test the electoral budget cycle, the partisan cycle and the government coalition theories. We find the presence…