Sustainability of Public Debt and Budget Deficit: Panel cointegration analysis for the European Union Member countries

@inproceedings{PROHL2006SustainabilityOP,
  title={Sustainability of Public Debt and Budget Deficit: Panel cointegration analysis for the European Union Member countries},
  author={SILIKA PROHL},
  year={2006}
}
  • SILIKA PROHL
  • Published 2006
In this study, we analyse the sustainability of fiscal policy of EU member countries within the panel cointegration and error-correction frameworks. Unlike the previous empirical papers in this area, we apply the test for panel cointegration between the primary budget deficit and the public debt defined in GDP ratios. Based on the cointegration test results, we conclude that the fiscal policy is consistent with the intertemporal budget constraint, i.e., it is sustainable in the panel of fifteen… CONTINUE READING

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