EconPapers    
Economics at your fingertips  
 

A "litmus test" of Deficit Sustainability: The Case of the Greek Budget Deficit

Dimitris Hatzinikolaou ()

Review of Economics & Finance, 2016, vol. 6, 65-73

Abstract: The paper applies three sustainability tests to the Greek budget deficit, which is known to be unsustainable, and can therefore be used to check the reliability of the three tests. Using three deficit definitions, i.e., in levels, in per capita terms, and in percent of GDP, I find the following results: (1) the unit-root test rejects sustainability only for the last definition; (2) the Hakkio-Rush test does not reject sustainability for any definition; and (3) the Hatzinikolaou-Simos test, which is applicable only for the first two definitions, strongly rejects sustainability, and so it proves to be more reliable, as expected.

Keywords: Budget deficit; Sustainability tests; Greece (search for similar items in EconPapers)
JEL-codes: C15 E62 H62 H63 (search for similar items in EconPapers)
Date: 2016
Note: The author is grateful to two anonymous referees of this Journal for their useful comments and suggestions, which improved this paper significantly. Of course, the usual disclaimer applies.
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.bapress.ca/ref/ref-article/1923-7529-2016-03-65-09.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bap:journl:160305

Ordering information: This journal article can be ordered from
17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada

Access Statistics for this article

Review of Economics & Finance is currently edited by H. Carlson

More articles in Review of Economics & Finance from Better Advances Press, Canada 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada.
Series data maintained by Carlson ().

 
Page updated 2017-09-29
Handle: RePEc:bap:journl:160305