The relationship between debt level and fiscal sustainability in OECD countries

Mariam Camarero, Josep Carrion-i-Silvestre and Cecilio Tamarit

No 1402, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: In this paper we unify the traditional approaches to testing for ?s- cal sustainability considering the stock-?ow system that ?scal variables con?gure. Our approach encompasses previous ways of testing for sus- tainability. The results obtained for a group of 17 OECD countries point to weak ?scal sustainability, as well as to the existence of cointegration between de?cit and debt, con?rming the relevance of the stock-?ow ap- proach. Allowing for structural breaks and multicointegration turns out to be of critical importance to assess whether the ?scal authorities apply their policies looking for sustainability and whether, simultaneously, they try to stabilize real debt target levels.

Keywords: fi?scal sustainability; cointegration; unit roots; structural breaks (search for similar items in EconPapers)
JEL-codes: C22 E62 H62 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-04
New Economics Papers: this item is included in nep-eec and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://repecsrv.uv.es/paper/RePEc/pdf/eec_1402.pdf First version, 2014 (application/pdf)

Related works:
Working Paper: The relationship between debt level and fiscal sustainability in OECD countries (2013)
Working Paper: The relationship between debt level and fiscal sustainability in OECD countries (2013)
Working Paper: The relationship between debt level and fiscal sustainability in OECD countries (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1402

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