Landolfo, Luigi (2008) Assessing the sustainability of fiscal policies : empirical evidence from the Euro area and the United States. Journal of Applied Economics, Volume 11 (Number 2). pp. 305-326.

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Abstract

This paper provides a formal theoretical framework for analyzing the sustainability of fiscal policy based on the government intertemporal budget constraint, and derives conditions that determine whether a fiscal stance is sustainable in the medium and long term. In contrast to previous studies, it uses a log-linearization of the public debt identity and generalizes the results obtained in the literature by using a multivariate test. The analysis is applied to the fiscal position of the United States and the Euro Area. On the basis of infinite horizon-tests the broad conclusion is that both regions have a sustainable fiscal policy.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HJ Public Finance
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Fiscal policy -- United States, Fiscal policy -- European Union Countries
Journal or Publication Title:	Journal of Applied Economics
Publisher:	Universidad del CEMA
ISSN:	1514-0326
Official Date:	November 2008
Dates:	Date Event November 2008 Published
Volume:	Volume 11
Number:	Number 2
Number of Pages:	22
Page Range:	pp. 305-326
Status:	Not Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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