Dinâmica não-linear e sustentabilidade da dívida pública brasileira

Luiz Lima () and Andrei Gomes Simonassi

No 587, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: This paper contributes to the debate on whether the Brazilian public debt is sustainable or not in the long run by considering threshold effects on the Brazilian Budget Deficit. Using data from 1947 to 1999 and a threshold autoregressive model, we find evidence of delays in fiscal stabilization. As suggested in Alesina (1991), delayed stabilizations reflect the existence of political constraints blocking deficit cuts, which are relaxed only when the budget deficit reaches a sufficiently high level, deemed to be unsustainable. In particular, our results suggest that, in the absence of seignorage, only when the increase in the budget deficit reaches 1.74% of the GDP will fiscal authorities intervene to reduce the deficit. If seignorage is allowed, the threshold increases to 2.2%, suggesting that seignorage makes government more tolerant to fiscal imbalances.

Date: 2005-04-01
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Citations: View citations in EconPapers (5)

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Working Paper: DINÂMICA NÃO-LINEAR E SUSTENTABILIDADE DA DÍVIDA PÚBLICA BRASILEIRA (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgewp:587

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