Recurrent explosive public debts and the long-run fiscal sustainability

Bystrov, Victor; Mackiewicz, Michał

doi:10.1016/j.jpolmod.2019.10.002

Cited by 17 publications

(9 citation statements)

References 36 publications

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“…Simon ( 2012 ) applied the square terms in assessing the curvature of the earnings disparity model. As a result, in terms of the approximation approach, our analysis varies from the analysis of Bystrov and Mackiewicz ( 2020 ) in applying an extra improved approach to ascertain the public debt upper limit discovered by likelihood ratio statistics.…”

Section: Resultsmentioning

confidence: 99%

Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19

Chien

Chau

Aldeehani

et al. 2022

Econ Change Restruct

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External debt correlation and the sustainable economic development pathway within the South Asian sub-region is analysed in this research paper. The longitudinal root-analysis, the pooled ordinary least square, quantile estimation, and output estimation were utilized to evaluate the data obtained from the World Bank Development Indicators for the period of 2000–2018. We discovered that total external debt and external debt services affect 39% plus 31%, respectively, after the robust regression analysis was carried out. Besides that, the findings demonstrate direct expansionary impacts of fiscal policy crosswise in developing economies within the study timeframe. Remarkably, the advancements in state establishments encourage the “gathering impact” of fiscal policy implementation. The findings depict that the entire circumstances set a stiffer restraint on public expenditure, indicating a self-losing fiscal austerity situation which entails the impact of the company’s liabilities. Inversely, the unrestrained countercyclical policy bars the knock-on impact of external problems, resulting in an improved economic system activity performance as well as decreasing the probability of economic predicaments after COVID-19.

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Section: Resultsmentioning

confidence: 99%

Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19

Chien

Chau

Aldeehani

et al. 2022

Econ Change Restruct

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show abstract

“…Yoon (2012b), which uses the same empirical procedures with quarterly data for the US budget deficit and for the period 1947:Q1–2007:Q3, finds some evidence that the postwar US budget deficit was explosive. Bystrov and Mackiewicz (2012) applied the procedure proposed by PSY to identify episodes of explosive debt dynamics in Sweden, the UK and the USA for the period 1792–2012. They find evidence of recurrent explosive behavior of public debt in the three advanced economies.…”

Section: Resultsmentioning

confidence: 99%

Testing for multiple bubbles: historical episodes on the sustainability of public debt in Spain, 1850–2020

Esteve

Prats

2022

AEA

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Purpose This paper aims to analyze the dynamics of the Spanish public debt–gross domestic product ratio during the period 1850–2020. Design/methodology/approach This study uses a recent procedure to test for recurrent explosive behavior (Phillips et al., 2011; Phillips et al., 2015a, 2015b) to identify episodes of explosive public debt dynamics and also the episodes of fiscal adjustments over this long period. Findings The identified episodes of explosive behavior of public debt coincided with fiscal stress events, whereas fiscal adjustments and changes in economic policies stabilized public finances after periods of explosive dynamics of public debt. Originality/value The longer than usual span of the data should allow the authors to obtain some more robust results than in most of previous analyses of long-run sustainability.

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“…Although several of the cited scholars chose to allow for the time-varying behaviour of the fiscal authorities, a dominant strand of the literature treats fiscal sustainability as a permanent characteristic of the economy (Bystrov and Mackiewicz, 2020). Fiscal policy is tested to be either sustainable or unsustainable over the whole sample, which can be anywhere between a few decades to over two hundred years (as in the case of two countries with the longest recorded fiscal history, i.e.…”

Section: Empirical Methodsmentioning

confidence: 99%

“…However, so far, these methods have been applied almost purely to a few highly developed countries with long available recorded fiscal history, such as the United States, United Kingdom or Sweden (Bystrov and Mackiewicz, 2020). In this paper, we extend their use to a group of southern African countries to analyse if there have been any serious episodes of unsustainability in recent history and, in particular, how they responded to the two most recent economic slowdowns that might result in severe fiscal problems.…”

Section: Empirical Methodsmentioning

confidence: 99%

The sustainability of fiscal policy in southern African countries–a comparative empirical perspective

Mackiewicz

2021

IJOEM

Self Cite

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PurposeThe purpose of the paper is to assess the fiscal sustainability of nine southern African countries that belong to the Southern African Development Community.Design/methodology/approachIn this paper, the author performs a novel time-varying analysis of fiscal sustainability in southern African countries.FindingsThe authors found that in Zimbabwe and Namibia, the formal condition of solvency was not fulfilled, resulting in the explosive growth of debt during the recent slowdown. In contrast, Angola, Botswana and Malawi prove to run sustainable fiscal policies, and they were also fiscally invulnerable to the recent unfavourable economic developments in Africa. For the rest of the countries in the sample (Eswatini, Lesotho, South Africa and Zambia), the results are mixed.Originality/valueIn the existing literature, there is abundance of empirical evidence concerning fiscal sustainability in European and American countries. In contrast, there is strikingly little knowledge concerning this phenomenon in African countries. The authors tried to fill this gap using a novel, time-varying approach.

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Recurrent explosive public debts and the long-run fiscal sustainability

Cited by 17 publications

References 36 publications

Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19

Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19

Testing for multiple bubbles: historical episodes on the sustainability of public debt in Spain, 1850–2020

The sustainability of fiscal policy in southern African countries–a comparative empirical perspective

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