Fiscal sustainability analysis in EU countries: a dynamic macro-panel approach

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Polat G., POLAT O.

Eastern Journal of European Studies, cilt.12, sa.1, ss.219-241, 2021 (ESCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 12 Sayı: 1
  • Basım Tarihi: 2021
  • Doi Numarası: 10.47743/ejes-2021-0109
  • Dergi Adı: Eastern Journal of European Studies
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), Scopus
  • Sayfa Sayıları: ss.219-241
  • Anahtar Kelimeler: Fiscal Sustainability, Intertemporal Budget Constraint, Panel Data Analysis
  • Bilecik Şeyh Edebali Üniversitesi Adresli: Evet

Özet

In this work, we analyze. fiscal sustainability, for 26 EUand PIIGS countries in terms of Bohn's (2008) approach. In this context, we use primary surplus-to-GDP, public debt-to-GDP, government revenues/expenditures-to-GDP, business cycle, and fluctuations in government expenditures variables in the period 1995-2018. A positive and long-run relationship between lagged public debt and primary surplus-to-GDP indicates that fiscal policy is sustainable for the EU, overall. However, the fiscal sustainability criterion is not met for the PIIGS since the transversality condition is not met. Empirical. findings of the study underline an effective regulatory policy. framework to monitor fiscal policy developments for both core and periphery EU states.