We investigate the sustainability of fiscal policy in a set of 19 European Monetary Union (EMU) countries over the period 1970-2016. Panel unit root tests in the presence of cross-section dependence show that the government debt series is stationary, indicating that the solvency condition would be satisfied for these countries. This confirms the effectiveness of the austerity measures implemented by these member states. Moreover, an unobserved common factor drives the co-movement of government debt in the Eurozone.
Brady, G.L., Magazzino, C. (2018). Sustainability and co-movement of Government Debt in EMU Countries: A Panel Data Analysis. SOUTHERN ECONOMIC JOURNAL, 85(1), 189-202 [10.1002/soej.12269].
Sustainability and co-movement of Government Debt in EMU Countries: A Panel Data Analysis
Magazzino C.
2018-01-01
Abstract
We investigate the sustainability of fiscal policy in a set of 19 European Monetary Union (EMU) countries over the period 1970-2016. Panel unit root tests in the presence of cross-section dependence show that the government debt series is stationary, indicating that the solvency condition would be satisfied for these countries. This confirms the effectiveness of the austerity measures implemented by these member states. Moreover, an unobserved common factor drives the co-movement of government debt in the Eurozone.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
