Resource title

Testing sustainability of German fiscal policy : evidence for the period 1960 - 2003

Resource image

image for OpenScout resource :: Testing sustainability of German fiscal policy : evidence for the period 1960 - 2003

Resource description

In this paper we test whether German public debt has been sustainable by resorting to a test proposed by Bohn (1998). We apply non-parametric and semi-parametric regressions with time depending coefficients. This test shows that the mean of the coefficient relevant for sustainability has been significantly positive over the time period considered. However, there is a negative trend in that coefficient which seems to have ceased to decline only in the middle to late 1990s. Further, we find evidence that the response of the primary deficit is a Ushaped function of the debt ratio which first declines and then rises after a certain threshold of the debt ratio is exceeded.

Resource author

Alfred Greiner, Uwe Koeller, Willi Semmler

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18750

Resource license

Adapt according to the presented license agreement and reference the original author.