An Inquiry into the Sustainability of German Fiscal Policy: Some Time-Series Tests
AbstractSustainability of public debt has become a major issue in the debate over the success of the European Monetary Union. The authors pursue the question of whether Germanyâ€™s fiscal policy is sustainable. With sustainability of a given fiscal policy, the authors refer to a policy that satisfies the intertemporal budget constaint of the government, known as the no-Ponzi game condition. Although this question has been econometrically studied for the United States in many studies, it has not yet been pursued with German time-series data. Using annual data from 1955 to 1994, the results seem to indicate that the intertemporal budget constraint for Germany is not met. In particular, the deficits in the period after 1989 appear to have contributed to that trend. Although the question of whether the latter increase in debt will have a lasting effect is still an important issue, the methodology proposed here may be useful for studying other countries. The authors also briefly discuss the macroeconomic effects of adjustment policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by in its journal Public Finance Review.
Volume (Year): 27 (1999)
Issue (Month): 2 (March)
Contact details of provider:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Mark J. Holmes & Theodore Panagiotidis & Jesus Otero, 2008. "Are EU budgets stationary?," Discussion Paper Series 2008_07, Department of Economics, University of Macedonia, revised Sep 2008.
- Greiner, Alfred & Semmler, Willi, 2000. "Endogenous Growth, Government Debt and Budgetary Regimes," Journal of Macroeconomics, Elsevier, vol. 22(3), pages 363-384, July.
- Willi Semmler & Wenlang Zhang, 2004.
"Monetary and Fiscal Policy Interactions in the Euro Area,"
Springer, vol. 31(2), pages 205-227, June.
- Willi Semmler & Wenlang Zhang, 2004. "Monetary and Fiscal Policy Interactions in the Euro Area," Economic Change and Restructuring, Springer, vol. 31(2), pages 205-227, June.
- Gang Gong & Alfred Greiner & Willi Semmler, 2001. "Growth Effects of Fiscal Policy and Debt Sustainability in the EU," Empirica, Springer, vol. 28(1), pages 3-19, March.
- Frederico Gonzaga Jayme Junior, 2001. "External debt sustainability: empirical evidence in Brazil," Textos para DiscussÃ£o Cedeplar-UFMG td154, Cedeplar, Universidade Federal de Minas Gerais.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If references are entirely missing, you can add them using this form.