Threshold Effects in the US Budget Deficit

Philip Arestis, Andrea Cipollini () and Bassam Fattouh ()
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Andrea Cipollini: Queen Mary, University of London - Department of Economics
Bassam Fattouh: University of London - School of Oriental and African Studies (SOAS)

CEIS Research Paper from Tor Vergata University, CEIS

Abstract: We contribute to the debate on whether the US large federal budget deficits are sustainable in the long run. We model the US government deficit per capita as a threshold autoregressive process. We find evidence that the US budget deficit is sustainable in the long run and that economic policymakers will only intervene to reduce per capita deficit when it reaches a certain threshold.

Keywords: Government Deficit; Threshold; Unit Root (search for similar items in EconPapers)
JEL-codes: C32 E62 (search for similar items in EconPapers)
Pages: 22
Date: 2003-05-23
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Citations: View citations in EconPapers (3)

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Journal Article: Threshold Effects in the U.S. Budget Deficit (2004)
Working Paper: Threshold Effects in the U.S. Budget Deficit (2002)
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