Sustainability of the Fiscal Process in Developing Countries- Egypt, Iran and Turkey: A Multicointegration Approach – revised version: Fiscal Sustainability in Emerging Countries: Evidence from Iran and Turkey

Amir Kia ()
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Amir Kia: Department of Finance and Economics, Utah Valley University

No 05-08, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: This paper investigates the fiscal sustainability of three developing countries ? Egypt, Iran and Turkey ? for both stochastic and non-stochastic environments. Both cointegration and multicointegration methodologies were used to evaluate fiscal budgeting processes in these countries. A model for testing the sustainability of a fiscal policy, based on Barro’s tax smoothing, was also developed to test the Iranian fiscal policy. It was found that the fiscal budgeting process in Egypt and Turkey is weakly sustainable, but not in Iran. However, the Iranian fiscal policy, as far as oil and gas income is concerned, is a responsible, but not a fully responsible policy.

Keywords: fiscal sustainability; multicointegration and tax smoothing (search for similar items in EconPapers)
Pages: 48 pages
Date: 2005-09, Revised 2008-11
New Economics Papers: this item is included in nep-cwa and nep-pbe
Note: JEL codes: H60, E62, C32
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Published: Revised version: Fiscal Sustainability in Emerging Countries: Evidence from Iran and Turkey, Journal of Policy Modeling, Vol. 30, No. 6 (November 2008), pp. 957–972

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