The change in aggregate budget behavior in the 1990s: a cointegration-error correction model analysis

Abstract

Federal budget, Deficit sustainability, Structural break, H60, H62, H63,

Multi-step analysis of public finances sustainability

“…In the literature, fiscal sustainability analysis based on unit root or cointegration tests, has in the past been mostly performed for individual countries, giving rise to the problem of relatively short time series 2 . Usually, such country analyses tend to conclude that only a few developed economies satisfy the sustainability hypothesis, those being notably Germany (allowing for the reunification break), the Netherlands, Finland, and Austria, and the U.K., even if the question of the time span under consideration can be an issue for some studies (see Afonso, 2005;Blackley, 2009, andFève andHénin, 2000;Uctum and Wickens, 2000).…”