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Fiscal sustainability: a panel assessment for advanced economies

Author

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  • Ant�nio Afonso
  • João Tovar Jalles

Abstract

We assess the sustainability of public finances in OECD countries using panel unit root and cointegration analyses. Results show no cointegration (no sustainability) between revenues and expenditures, improvement of the primary balances after worsening debt ratios and causality from government debt to primary balances.

Suggested Citation

  • Ant�nio Afonso & João Tovar Jalles, 2015. "Fiscal sustainability: a panel assessment for advanced economies," Applied Economics Letters, Taylor & Francis Journals, vol. 22(11), pages 925-929, July.
    • Handle: RePEc:taf:apeclt:v:22:y:2015:i:11:p:925-929
    DOI: 10.1080/13504851.2014.987913
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    Cited by:

    1. Cosimo Magazzino, 2022. "Fiscal sustainability in the GCC countries," International Journal of Economic Policy Studies, Springer, vol. 16(2), pages 389-408, August.
    2. Shiv Shankar & Pushpa Trivedi, 2023. "Assessing India’s fiscal sustainability considering debt–deficit and financing dynamics," Indian Economic Review, Springer, vol. 58(1), pages 41-70, June.
    3. Gordon L. Brady & Cosimo Magazzino, 2018. "Sustainability and comovement of government debt in EMU Countries: A panel data analysis," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 189-202, July.
    4. Magazzino, Cosimo & Brady, Gordon L. & Forte, Francesco, 2019. "A panel data analysis of the fiscal sustainability of G-7 countries," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).
    5. María del Carmen Ramos-Herrera & Simón Sosvilla-Rivero, 2020. "Fiscal Sustainability in Aging Societies: Evidence from Euro Area Countries," Sustainability, MDPI, vol. 12(24), pages 1-20, December.
    6. António Afonso & José Carlos Coelho, 2024. "Budgetary Constrained Governments: Drivers of Time Varying Fiscal Sustainability in OECD Countries," CESifo Working Paper Series 11137, CESifo.
    7. María Deseada López Subires & Laura Alcaide Muñoz & Andrés Navarro Galera & Manuel Pedro Rodríguez Bolívar, 2019. "The Influence of Socio-Demographic Factors on Financial Sustainability of Public Services: A Comparative Analysis in Regional Governments and Local Governments," Sustainability, MDPI, vol. 11(21), pages 1-18, October.
    8. Mikhail B. Petrov & Leonid A. Serkov & Kseniya A. Zavyalova, 2023. "Causal analysis of the interinfluence of workforce productivity and rail freight intensity in the regions of the Ural Federal District," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 9(3), pages 310-324.
    9. Andrés Navarro-Galera & Francisco José Alcaraz-Quiles & David Ortiz-Rodriguez, 2018. "Enhancing Sustainability Transparency in Local Governments—An Empirical Research in Europe," Sustainability, MDPI, vol. 10(7), pages 1-22, June.
    10. Afonso, António & Alves, José & Monteiro, Sofia, 2024. "Sovereign risk dynamics in the EU: The time varying relevance of fiscal and external (im)balances," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 94(C).
    11. Manuel Pedro Rodríguez Bolívar & Andrés Navarro Galera & Laura Alcaide Muñoz & María Deseada López Subires, 2016. "Analyzing Forces to the Financial Contribution of Local Governments to Sustainable Development," Sustainability, MDPI, vol. 8(9), pages 1-18, September.
    12. Helmut Herwartz & Malte Rengel, 2018. "Size-corrected inference in fiscal policy reaction functions: a three country assessment," Empirical Economics, Springer, vol. 55(2), pages 391-416, September.
    13. Chen, Shyh-Wei & Wu, An-Chi, 2018. "Is there a bubble component in government debt? New international evidence," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 467-486.
    14. Francisco J. Alcaraz-Quiles & Andrés Navarro-Galera & David Ortiz-Rodríguez, 2020. "The contribution of the right to information laws in Europe to local government transparency on sustainability," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 20(1), pages 161-178, March.
    15. María del Carmen Ramos-Herrera & María A. Prats, 2020. "Fiscal Sustainability in the European Countries: A Panel ARDL Approach and a Dynamic Panel Threshold Model," Sustainability, MDPI, vol. 12(20), pages 1-14, October.
    16. Ayesha Naz & Muhammad Zamir, 2024. "Tax-Spend or Spend-Tax Hypotheses: A Case Study of Pakistan using Threshold Cointegration with Asymmetric Adjustment," Journal of Economic Sciences, Federal Urdu University Islamabad, Department of Economics, vol. 3(1), pages 13-24, June.
    17. Malte Rengel, 2020. "Sustainability of European fiscal balances: Just a statistical artifact?," Empirical Economics, Springer, vol. 58(4), pages 1681-1712, April.
    18. Gabriel Puron‐Cid, 2021. "The effects of corruption of public officials on the dimensions of financial sustainability of state governments in Mexico," Public Budgeting & Finance, Wiley Blackwell, vol. 41(2), pages 65-88, June.
    19. Radmila Dragutinović Mitrović & Olgica Glavaški & Emilija Beker Pucar, 2019. "Fiscal Sustainability in Flow Model: Panel Cointegration Approach for the EU-28," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 15-24, August.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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