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The sustainability of fiscal policies in the European Union

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  • Athanasios Papadopoulos
  • Moïse Sidiropoulos

Abstract

This paper examines the stationarity of the inclusive-of-interest public deficit for five European Union economies, four of them being recently selected for entry into the European Monetary Union. Unit root tests are used not only to examine structural breaks and cointegration analysis, but also to investigate for regime shifts. They support the occurrence of sustainable deficits for the Greek, Spanish, and Portuguese economies. On the contrary, Italy and Belgium may incur unsustainable deficits, implying that their selection in Phase 2 of the European Monetary Union is questionable. Copyright International Atlantic Economic Society 1999

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  • Athanasios Papadopoulos & Moïse Sidiropoulos, 1999. "The sustainability of fiscal policies in the European Union," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 5(3), pages 289-307, August.
    • Handle: RePEc:kap:iaecre:v:5:y:1999:i:3:p:289-307:10.1007/bf02296413
    DOI: 10.1007/BF02296413
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