The Sustainability of Government Deficits: Implications of the Present-Value Borrowing Constraint
David Wilcox ()
Journal of Money, Credit and Banking, 1989, vol. 21, issue 3, 291-306
This paper introduces a new methodology for evaluating the sustainability of fiscal policy. The new methodology is distinguished from most existing tests in two important respects: first, it allows for stochastic real interest rates; and second, it is both necessary and sufficient. Results from the application of the new test suggest that recent fiscal policy in the United States has not been sustainable. The paper contrasts its findings with those of James D. Hamilton and Marjorie A. Flavin (1986). Copyright 1989 by Ohio State University Press.
References: Add references at CitEc
Citations: View citations in EconPapers (185) Track citations by RSS feed
Downloads: (external link)
http://links.jstor.org/sici?sici=0022-2879%2819890 ... 0.CO%3B2-5&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
Working Paper: The substainability of government deficits: implications of the present- value borrowing constraint (1987)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:21:y:1989:i:3:p:291-306
Access Statistics for this article
Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West
More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing ().