TY - JOUR
T1 - Testing fiscal sustainability in OECD countries
T2 - new evidence from the past centuries
AU - Saadaoui, Jamel
AU - Lau, Chi Keung Marco
AU - Cai, Yifei
N1 - Publisher Copyright:
© 2022 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2022/11/30
Y1 - 2022/11/30
N2 - Using three complementary approaches that examine the fulfilment of the intertemporal budget constraint while avoiding explosive behaviour, this study examines the stationarity and the sustainability of public finance for six industrial countries over the period spanning from 1870 to 2017. According to Fourier DF unit root tests, time-varying fiscal reaction functions and threshold reaction functions, we find that longer-run debt sustainability is not rejected for the UK, Sweden, and for the US. The evidence is somewhat equivocal for Canada, Italy and Portugal.
AB - Using three complementary approaches that examine the fulfilment of the intertemporal budget constraint while avoiding explosive behaviour, this study examines the stationarity and the sustainability of public finance for six industrial countries over the period spanning from 1870 to 2017. According to Fourier DF unit root tests, time-varying fiscal reaction functions and threshold reaction functions, we find that longer-run debt sustainability is not rejected for the UK, Sweden, and for the US. The evidence is somewhat equivocal for Canada, Italy and Portugal.
UR - http://www.scopus.com/inward/record.url?scp=85141475075&partnerID=8YFLogxK
U2 - 10.1080/13504851.2022.2142502
DO - 10.1080/13504851.2022.2142502
M3 - Article
AN - SCOPUS:85141475075
SN - 1350-4851
JO - Applied Economics Letters
JF - Applied Economics Letters
ER -