A Nonlinear Approach to Public Finance Sustainability in Latin America

Chortareas, Georgios; Kapetanios, George; Uctum, Merih

doi:10.2139/ssrn.370084

Cited by 2 publications

(1 citation statement)

References 36 publications

(17 reference statements)

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“…expected future discounted primary budget surpluses. See Hamilton and Flavin (1986), Hakkio and Rush (1991), Trehan and Walsh (1988), Wilcox (1989) and Chortareas, Kapetanios and Uctum (2002) for a review of the literature. A sustainable policy can be defined as a policy leading to a stable debt-GDP ratio.…”

Section: B Sustainability Rulementioning

confidence: 99%

Are Southern‐poor Countries’ Governments more Profligate than their Northern‐rich Counterparts? Fiscal Criteria and Impulse Responses

Uctum

2006

World Economy

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This study examines the health of public finances in different geographical regions by emphasising the discrepancies in North versus South and rich versus poor countries. The last decade's debt and deficit figures depicting a general fiscal consolidation across regions and income levels show signs of worsening. When the fiscal criteria are adjusted for cyclical factors, fiscal pressure appears in most countries since the end of the 1990s, but has been more persistent in poor countries, and in Asia. The dynamics of governments’ reaction to debt accumulation reveals, however, that most regions exhibit consistent anti‐debt policies to various degrees. The exception is the Latin American and Caribbean region where results suggest a lack of debt‐fighting policies. Among income categories, rich countries generate the highest primary surpluses when confronted with debt accumulation.

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Section: B Sustainability Rulementioning

confidence: 99%

Are Southern‐poor Countries’ Governments more Profligate than their Northern‐rich Counterparts? Fiscal Criteria and Impulse Responses

Uctum

2006

World Economy

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Is the budget deficit sustainable when fiscal policy is non-linear? The case of Spain

Bajo‐Rubio

Díaz‐Roldán

Esteve

2006

Journal of Macroeconomics

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In this paper we re-examine the long-run sustainability of budget deficits, when fiscal policy is conducted as a nonlinear process. Our empirical methodology makes use of recent developments on threshold cointegration that consider the possibility of a nonlinear relationship between government revenues and expenditures. The analysis is applied to the case of Spain, a country that has recently accomplished an important fiscal consolidation. Overall, our results suggest the presence of significant nonlinear effects in Spanish fiscal policy, so that fiscal authorities would cut deficits only if they are 'large', and assuring their long-run sustainability.

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A Nonlinear Approach to Public Finance Sustainability in Latin America

Cited by 2 publications

References 36 publications

Are Southern‐poor Countries’ Governments more Profligate than their Northern‐rich Counterparts? Fiscal Criteria and Impulse Responses

Are Southern‐poor Countries’ Governments more Profligate than their Northern‐rich Counterparts? Fiscal Criteria and Impulse Responses

Is the budget deficit sustainable when fiscal policy is non-linear? The case of Spain

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