Economics at your fingertips  

How Sustainable are Latin American Fiscal Deficits: A Panel Data Approach

Jacobo Campo Robledo () and Luis Melo-Velandia ()

Borradores de Economia from Banco de la Republica de Colombia

Abstract: This paper evaluates the fiscal sustainability hypothesis for eight Latin American countries, Argentina, Chile, Colombia, Ecuador, Panama, Peru, Paraguay and Uruguay, during the period 1960 - 2009. Using second generation cointegration panel data models, we test whether Government revenues and primary expenditures are sustainable in the long-run. This methodology allows for cross-sectional dependence among countries and is also appropriated under the existence of potential structural breaks. We found empirical evidence of sustainability of the primary deficit for these Latin American countries but only in a weak sense.

Keywords: Fiscal Sustainability; Panel Unit Root tests; Panel Cointegration tests; Structural Change. (search for similar items in EconPapers)
JEL-codes: C22 C23 H62 (search for similar items in EconPapers)
Pages: 16
Date: 2011-11
New Economics Papers: this item is included in nep-lam and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (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:

Access Statistics for this paper

More papers in Borradores de Economia from Banco de la Republica de Colombia Cra 7 # 14-78. Contact information at EDIRC.
Bibliographic data for series maintained by Clorith Angélica Bahos Olivera ().

Page updated 2023-02-07
Handle: RePEc:bdr:borrec:679