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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/26271
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| Title: | | What do we really know about fiscal sustainability in the EU?: a panel data diagnostic  |
| Authors: | | Afonso, António Rault, Christophe |
| Issue Date: | | 2008 |
| Series/Report no.: | | CESifo working paper 2226 |
| Abstract: | | We assess the sustainability of public finances in the EU15 using stationarity and cointegration analysis. Specifically, we use panel unit root tests of the first and second generation allowing in some cases for structural breaks. We also apply modern panel cointegration techniques developed by Pedroni (1999, 2004), generalized by Banerjee and Carrion-i-Silvestre (2006) and Westerlund and Edgerton (2007), to a structural long-run equation between general government expenditures and revenues. While sustainability may be lacking in individual cases, fiscal policy was overall sustainable both for the EU15 panel set, and within some sub-periods. |
| Subjects: | | intertemporal budget constraint fiscal sustainability EU panel unit root panel cointegration |
| JEL: | | C23 E62 H62 H63 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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