An Efficient Test of Fiscal Sustainability

Vasco Gabriel and Pataaree Sangduan
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Pataaree Sangduan: Bureau of the Budget, Thailand

No 32/2010, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: We suggest a multivariate efficient test of the 'strong' fiscal sustainability hypothesis, based on Horvath and Watson's (1995) cointegration test when cointegration vectors are pre-specified. Using data for a set of developed and developing economies, we show that, unlike our procedure, conventional methodologies tend to penalize the sustainability hypothesis.

JEL-codes: C32 E62 H60 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ecm, nep-pbe and nep-sea
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Journal Article: An efficient test of fiscal sustainability (2010)
Working Paper: An Efficient test of Fiscal Sustainability (2010)
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