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Anwendung des Nachhaltigkeitsansatzes von Bohn zur Etablierung eines Frühindikators in den öffentlichen Finanzen Beitrag zur aktuellen Debatte der Föderalismuskommission II

Listed author(s):
  • Bodo Herzog

    (Professor für Volkswirtschaftslehre, ESB Business School der Hochschule Reutlingen, Alteburgstraße 150, D-72762 Reutlingen)

The question of whether public debt in Europe’s largest economy is sustainable in the long run has received great attention. After all, Germany breached the three percent deficit threshold of the “Stability and Growth Pact” in four successive years, i. e. from 2002 to 2005. In this paper I investigate whether German public finances – Federal and all State governments – have been sustainable during the last four decades. This means finding answers to the following questions: How have German governments reacted to the accumulation of approximately 1.5 billion euro of debt? Have they taken corrective action, or have they let the debt grow? Closer empirical discussion of these questions is also important because of the recent political discussion and new institutional proposals to limit future debt policy by the federal commission (“Föderalismuskommission”). My paper is the first to empirically analyse the sustainability of fiscal policy in Federal Government (“Bund”) and the Federal States (“Länder”). I analyse debt behaviour in Germany on the basis of a unique and newly constructed data sample covering 1970 to 2005. The results are surprising: Fiscal policy is far more sustainable than originally supposed. My paper is the first to apply Bohn’s sustainability criteria to Germany and two Federal States – Baden-Württemberg and Berlin.

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Article provided by Credit and Capital Markets in its journal Kredit und Kapital.

Volume (Year): 43 (2010)
Issue (Month): 2 ()
Pages: 183-206

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Handle: RePEc:kuk:journl:v:43:y:2010:i:2:p:183-206
Contact details of provider: Web page: http://www.credit-and-capital-markets.de/

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  1. Willem H. Buiter, 1996. "Generational Accounts, Aggregate Savings, and Intergenerational Distribution," IMF Working Papers 96/76, International Monetary Fund.
  2. Diamond, Peter, 1996. "Generational Accounts and Generational Balance: An Assessment," National Tax Journal, National Tax Association, vol. 49(4), pages 597-607, December.
  3. Hagist, Christian & Raffelhüschen, Bernd & Weddige, Olaf, 2006. "Brandmelder der Zukunft: Die Generationenbilanz 2004," FZG Discussion Papers 12, University of Freiburg, Research Center for Generational Contracts (FZG).
  4. James D. Hamilton & Marjorie A. Flavin, 1985. "On the Limitations of Government Borrowing: A Framework for Empirical Testing," NBER Working Papers 1632, National Bureau of Economic Research, Inc.
  5. Feist, Karen & Raffelhüschen, Bernd, 2000. "Möglichkeiten und Grenzen der Generationenbilanzierung," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 80(7), pages 440-448.
  6. Andrew Abel & Gregory N. Mankiw & Lawrence H. Summers & Richard Zeckhauser, "undated". "Assessing Dynamic Efficiency: Theory and Evidence," Rodney L. White Center for Financial Research Working Papers 14-88, Wharton School Rodney L. White Center for Financial Research.
  7. Henning Bohn, 1998. "The Behavior of U. S. Public Debt and Deficits," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 949-963.
  8. Bohn, H., 1990. "The Sutainability Of Budget Deficits In A Stochastic Economy," Weiss Center Working Papers 6-90, Wharton School - Weiss Center for International Financial Research.
  9. David W. Wilcox, 1987. "The substainability of government deficits: implications of the present- value borrowing constraint," Working Paper Series / Economic Activity Section 77, Board of Governors of the Federal Reserve System (U.S.).
  10. Barro, Robert J., 1979. "On the Determination of the Public Debt," Scholarly Articles 3451400, Harvard University Department of Economics.
  11. Homburg, Stefan, 1992. "Efficient Economic Growth," EconStor Books, ZBW - German National Library of Economics, number 92903.
  12. repec:ntj:journl:v:49:y:1996:i:no._4:p:597-607 is not listed on IDEAS
  13. Robert Haveman, 1994. "Should Generational Accounts Replace Public Budgets and Deficits?," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 95-111, Winter.
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