Indicators and Tests of Sustainability: The Italian Case
AbstractThe issue of sustainability of Italian fiscal policy in the period 1970-2006 is studied with two instruments: indicators and tests. The indicators Primary Gap, Tax Gap developed by Chouraqui et al. (1990) and S2 by the European Commission show a nonsustainable fiscal policy. Tests of sustainability following Trehan and Walsh (1988), Hakkio and Rush (1991) and Bohn (2008) show an opposite result accepting the sustainability path of fiscal variables. According to the strategy proposed by De Luzenberger and Marini (1993) a Chow-type test, that confirms a systematic change of fiscal policy in 1992-1993, permits to discern the two conflicting results in favour of the indicators’ response.
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Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 98 (2008)
Issue (Month): 6 (November-December)
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fiscal sustainability; fiscal indicators and tests of sustainability; Chow test;
Find related papers by JEL classification:
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
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