U.S. Deficit Sustainability: A New Approach Based on Multiple Endogenous Breaks

Gael Martin

No 1/98, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: Recent empirical work has questioned the consistency of U.S. fiscal policy with an intertemporal budget constraint. Empirical results have tended to indicate that the deficit process has undergone at least one structural shift during recent decades, with the deficit becoming either unsustainable or sustainable in only a weak sense in the post-shift period. In this paper, we re-examine sustainability using a new approach, based on a cointegration model with multiple endogenous breaks.

Keywords: FISCAL POLICY; UNITED STATES; DEFICIT (search for similar items in EconPapers)
JEL-codes: H62 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1998
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Journal Article: US deficit sustainability: a new approach based on multiple endogenous breaks (2000)
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