What do we really know about fiscal sustainability in the EU? A panel data diagnostic

Antonio Afonso and Christophe Rault

No 820, Working Paper Series from European Central Bank

Abstract: We assess the sustainability of public finances in the EU15 over the period 1970-2006 using stationarity and cointegration analysis. Specifically, we use panel unit root tests of the first and second generation allowing in some cases for structural breaks. We also apply modern panel cointegration techniques developed by Pedroni (1999, 2004), generalized by Banerjee and Carrion-i-Silvestre (2006) and Westerlund and Edgerton (2007), to a structural long-run equation between general government expenditures and revenues. While estimations point to fiscal sustainability being an issue in some countries, fiscal policy was sustainable both for the EU15 panel set, and within subperiods (1970-1991 and 1992-2006). JEL Classification: C23, E62, H62, H63

Keywords: EU; fiscal sustainability; intertemporal budget constraint; panel cointegration.; panel unit root (search for similar items in EconPapers)
Date: 2007-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp820.pdf (application/pdf)

Related works:
Journal Article: What do we really know about fiscal sustainability in the EU? A panel data diagnostic (2010)
Working Paper: What do we really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic (2008)
Working Paper: What do we Really Know About Fiscal Sustainability in the EU? A Panel Data Diagnostic (2008)
Working Paper: What do we Really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic (2008)
Working Paper: What do we Really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic (2008)
Working Paper: What do we Really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic (2008)
Working Paper: What do we Really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic (2008)
Working Paper: What do we Really Know about Fiscal Sustainability in the EU ? A Panel Data Diagnostic (2008)
Working Paper: What do we really know about fiscal sustainability in the EU? A panel data diagnostic (2007)
Working Paper: What We Really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic (2007)
Working Paper: What do we really know about fiscal sustainability in the EU? A panel data diagnostic (2007)
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:ecb:ecbwps:2007820

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().