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Policy regime changes and the long-run sustainability of fiscal policy: an application to Greece

Listed author(s):
  • Makrydakis, Stelios
  • Tzavalis, Elias
  • Balfoussias, Athanassios

This paper questions the widespead practice of assessing the hypothesis of long-run fiscal policy sustainability by means of conventional unit-root tests that do not allow for the possible impact of regime shifts. Using the Greek economy as a model case, the Zivot- Andrews squential integrability testing procedure which allows for the endogenous determination of possible regime changes is deployed to this end.

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File URL: http://www.sciencedirect.com/science/article/pii/S0264-9993(98)00026-1
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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 16 (1998)
Issue (Month): 1 (January)
Pages: 71-86

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Handle: RePEc:eee:ecmode:v:16:y:1998:i:1:p:71-86
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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