Author(s):
Gabriel, Vasco J. 
; Sangduan, Pataaree
Date: 2010
Persistent ID: http://hdl.handle.net/1822/11659
Origin: RepositóriUM - Universidade do Minho
Document details
An efficient test of fiscal sustainability
Description
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.
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.
Document Type
Research paper
Language English
Language English
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