On the Sustainability of Budget Deficits in the Euro Area
We empirically examined the issue of budget sustainability for 11 euro area countries. Empirical analyses using non-stationary panel data analysis rejected, with statistical significance, the possibility of fiscal collapse in euro area countries during the period 1999 to 2005. This supports the notion that fiscal discipline rules are functioning and individual countries' fiscal deficits are steadily shrinking.
Volume (Year): 29 (2009)
Issue (Month): 1 ()
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