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Article dans une revue Economica Année : 2006

Public debt, the unit root hypothesis and structural breaks: a multi-country analysis

Résumé

We assess fiscal performances in G7 and selected Latin American and Asian countries. We analyze two questions: (i) have public finances been sustainable? (ii) do countries follow more restrictive fiscal policies when debt starts to rise? We find that: (i) The traditional unit root tests often overlook the corrective actions taken by many governments. Controlling for structural breaks changes the nonstationarity results dramatically among the three groups; (ii) Estimation of a reaction function for governments, expanded by incorporating structural breaks, provides further evidence for significant active anti-debt policies among the G7 and to a lesser extent in the other regions.
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Dates et versions

halshs-00081527, version 1 (23-06-2006)

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  • HAL Id : halshs-00081527 , version 1

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Merih Uctum, Thom Thurston, Remzi Uctum. Public debt, the unit root hypothesis and structural breaks: a multi-country analysis. Economica, 2006, 73 (289), pp.129-156. ⟨halshs-00081527⟩
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