Location of Repository

Fiscal policy sustainability: test of intertemporal borrowing constraints

By Huseyin Kalyoncu

Abstract

This paper examines sustainability of the fiscal stances of South Korea, Mexico, the Philippines, South Africa and Turkey. Using the usual intertemporal borrowing constraint, we have tested for a long-run relationship between revenue and expenditure plus interest payments. In our empirical analysis of the sustainability of fiscal stances, cointegration approaches have been used. Empirical results suggest that there exists a unique long-run or equilibrium relationship among variables for South Korea and Turkey. The cointegration results suggest that the Turkish and South Korean fiscal stances satisfy the weak sustainability condition. In the case of Mexico, the Philippines and South Africa cointegration results suggest that in these countries the fiscal stance is not sustainable (and violates their intertemporal budget constraints) in the long run.

DOI identifier: 10.1080/13504850500119104
OAI identifier:
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://www.informaworld.com/op... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.