Sustainability of the Fiscal Imbalance and Public Debt Under Fiscal Policy Asymmetries in Opec

Zahra Farajzade, Ahmad Jafari Samimi, Shahryar Zaroki and Mani Motameni
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Zahra Farajzade: PhD student, Department of Economics, University of Mazandaran, Mazandaran, Iran. z.farajzadeh02@umail.umz.ac.ir
Ahmad Jafari Samimi: Professor, Department of Theoretical Economics, University of Mazandaran, Mazandaran, Iran
Shahryar Zaroki: Associate Professor, Department of Energy Economics University of Mazandaran, Mazandaran, Iran
Mani Motameni: Associate Professor, Department of Energy Economics University of Mazandaran, Mazandaran, Iran

Quarterly Journal of Applied Theories of Economics, 2025, vol. 12, issue 1, 1-24

Abstract: Considering that fiscal imbalance is one of the basic problems of governments in most countries faced by governments in most countries, today, the international Society places significant importance on the fiscal imbalances of countries, and a low level has become one of the important indicators of public finance health. Since there is an expectation of asymmetry in the budget adjustment process, this article aimed to investigate the sustainability of fiscal imbalance and public debt in the conditions of asymmetric fiscal policy in OPEC during the annual period of 2002-2021. In this regard, testing for fiscal imbalance and public debt sustainability is used to estimate the symmetric Panel ARDL and asymmetric Panel NARDL. The results indicate that the fiscal imbalance and public debt are on the path of weak sustainability. The analysis of asymmetric coefficients with the estimation of the Fiscal reaction function shows that the Fiscal policy stance is procyclical, with strong stabilization Tendencies in economic booms and an unstable state in recessions. Against upsurges in the debt-to-GDP ratio, authorities have been found to pursue fiscal integration, so this situation shows a weak form of sustainability

Keywords: fiscal imbalance sustainability; public debt sustainability; fiscal reaction function; Non-linear Autoregressive distribution lag panel data; asymmetric policy effects (search for similar items in EconPapers)
JEL-codes: C22 E32 G32 O44 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:qjatoe:021661

DOI: 10.22034/ecoj.2024.61800.3315

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