Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/84149
Authors: 
Legrenzi, Gabriella Deborah
Milas, Costas
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4385
Abstract: 
We extend previous literature on fiscal policy sustainability by introducing non-linear fiscal reaction functions with endogenously estimated state-varying thresholds to capture the behaviour of fiscal policy authorities during “good” and “bad” times. These thresholds vary with the level of debt, the economic cycle and an index of financial pressure.
Subjects: 
debt sustainability
fiscal reaction function
state-varying threshold
JEL: 
C20
H30
H50
Document Type: 
Working Paper

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