Loughborough University
Leicestershire, UK
LE11 3TU
+44 (0)1509 263171
Loughborough University

Loughborough University Institutional Repository

Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/2822

Title: Are EU budget deficits sustainable?
Authors: Holmes, Mark J.
Otero, Jesus
Panagiotidis, Theodore
Keywords: Heterogeneous dynamic panels
Fiscal sustainability
Mean re-version
Panel stationarity test
Issue Date: 2007
Abstract: In this paper, we test for the stationarity and sustainability of European Union budget deficits over the period 1971 to 2006, using a panel of thirteen member countries. Our testing strategy addresses two key concerns with re- gard to unit root panel data testing, namely (i) the identification of which members-states are stationary, and (ii) the presence of cross-sectional depen- dence. We employ a moving block bootstrap approach to the Hadri (2000) procedure that tests the null of joint stationarity. In contrast to the existing literature, we find that the EU countries considered are characterised by fiscal sustainability over the full sample period. This conclusion also holds when analysing sub-periods based on before and after the Maastricht treaty.
Description: This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2007_13.html.
URI: https://dspace.lboro.ac.uk/2134/2822
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

Files associated with this item:

File Description SizeFormat
EU_fiscal.pdf188 kBAdobe PDFView/Open

 

SFX Query

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.