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Panel Cointegration Tests on the Fiscal Sustainability of German Laender

Author

Listed:
  • Heiko T. Burret
  • Lars P. Feld
  • Kö
  • Ekkehard A. hler

Abstract

This paper provides new evidence on the sustainability of public finances in German states (Laender) by exploiting a newly compiled database covering the years 1950]2011. Unlike previous studies on Germany, we analyze fiscal sustainability by applying gsecond generationh panel cointegration techniques. A unique identification strategy for the selection of sub]panels improves the robustness of panel cointegration tests and reveals that Laender finances are hardly sustainable.

Suggested Citation

  • Heiko T. Burret & Lars P. Feld & Kö & Ekkehard A. hler, 2014. "Panel Cointegration Tests on the Fiscal Sustainability of German Laender," CESifo Working Paper Series 4929, CESifo.
    • Handle: RePEc:ces:ceswps:_4929
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    Cited by:

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    2. Bofinger, Peter & Buch, Claudia M. & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2013. "Gegen eine rückwärtsgewandte Wirtschaftspolitik. Jahresgutachten 2013/14 [Against a backward-looking economic policy. Annual Report 2013/14]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201314.
    3. Heiko T. Burret & Lars P. Feld, 2014. "A Note on Budget Rules and Fiscal Federalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(1), pages 03-11, 04.
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    5. Maryam Ishaq, 2020. "Regional Economic Integration and Productivity Convergence: Empirical Evidence from East Asia," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 25(2), pages 23-53, July-Dec.
    6. Chakamera, Chengete & Alagidede, Paul, 2018. "Electricity crisis and the effect of CO2 emissions on infrastructure-growth nexus in Sub Saharan Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 945-958.
    7. Heiko T. Burret & Lars P. Feld, 2014. "A Note on Budget Rules and Fiscal Federalism," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(01), pages 03-11, April.

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    More about this item

    Keywords

    fiscal sustainability; federalism; unit root; panel cointegration;
    All these keywords.

    JEL classification:

    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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