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Public finances in the EU-27: Are they sustainable?

Author

Listed:
  • Juan Carlos Cuestas

    (Eesti Pank and Tallinn University of Technology
    Jaume I University)

  • Luis A. Gil-Alana

    (University of Navarra)

  • Laura Sauci

    (University of Huelva)

Abstract

In this paper we aim to analyse the degree of mean reversion of public expenditure, revenue and the difference between them, over GDP for 27 European Union (EU) countries. To gain flexibility in the analysis of the order of integration of the variables we apply fractional integration techniques. In general, we find evidence of mean reversion in all countries.

Suggested Citation

  • Juan Carlos Cuestas & Luis A. Gil-Alana & Laura Sauci, 2020. "Public finances in the EU-27: Are they sustainable?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(1), pages 181-204, February.
    • Handle: RePEc:kap:empiri:v:47:y:2020:i:1:d:10.1007_s10663-018-9411-0
    DOI: 10.1007/s10663-018-9411-0
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    More about this item

    Keywords

    Public revenues; Public expenditures; Fractional integration;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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