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Sustainability of Portuguese Fiscal Policy in Historical Perspective Author info | Abstract | Publisher info | Download info | Related research | Statistics Carlos Fonseca Marinheiro ()
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This paper analyses the sustainability of Portuguese public finances, making use of a long dataset with more than a full century of observations. The use of such a long dataset is appropriate because both unit root and cointegration tests require a long period of data. The sustainability testing procedure is based on unit root and cointegration tests. We find considerable evidence in favour of sustainability for the 1903-2003 period. The overall conclusion of sustainability for the 1903-2003 period is not maintained for the more recent 1975-2003 period, which is characterised by the largest GDP deficit ratios of our sample. This latter period appears to signal a shift to an unsustainable path in Portuguese fiscal policy. Hence, our results suggest that fiscal consolidation efforts must, in fact, be continued in Portugal.
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1399.
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Date of creation: 2005Date of revision:
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Keywords: fiscal sustainability ; sustainability of public debt ; intertemporal budget constraint ; government deficits and debt ; Portugal ; Other versions of this item:
Find related papers by JEL classification: 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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