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Fiscal Sustainability Analysis: The Case of PALOP Economies

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Listed:
  • António Afonso,
  • Emanuel Reis Leão,
  • Dilson Tiny,
  • Diptes C. P. Bhimjee

Abstract

The Global Financial Crisis has typically led to a significant widening of fiscal positions (i.e., higher budget deficits and public debt). We address the sustainability of public finances in Portuguese-speaking African countries (PALOP), through adequate econometric testing. Our findings for the period 1975-2015 suggest that most of the PALOP have compromised the sustainability of their corresponding fiscal positions, leading these economies to be set on unsustainable public finance trajectories. Key Words: Debt Sustainability, Global Financial Crisis, Fiscal Policy, PALOP

Suggested Citation

  • António Afonso, & Emanuel Reis Leão, & Dilson Tiny, & Diptes C. P. Bhimjee, 2017. "Fiscal Sustainability Analysis: The Case of PALOP Economies," Working Papers Department of Economics 2017/14, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    • Handle: RePEc:ise:isegwp:wp142017
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    References listed on IDEAS

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    1. Mthuli Ncube & Zuzana Brixiová, 2015. "Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead," Development Policy Review, Overseas Development Institute, vol. 33(5), pages 555-580, September.
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    3. António Afonso, 2005. "Fiscal Sustainability: The Unpleasant European Case," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(1), pages 19-44, March.
    4. Trehan, Bharat & Walsh, Carl E, 1991. "Testing Intertemporal Budget Constraints: Theory and Applications to U.S. Federal Budget and Current Account Deficits," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(2), pages 206-223, May.
    5. José Augusto Lopes da Veiga & Alexandra Ferreira-Lopes & Tiago Neves Sequeira, 2016. "Public Debt, Economic Growth and Inflation in African Economies," South African Journal of Economics, Economic Society of South Africa, vol. 84(2), pages 294-322, June.
    6. António Afonso & João Tovar Jalles, 2013. "Do fiscal rules matter for growth?," Applied Economics Letters, Taylor & Francis Journals, vol. 20(1), pages 34-40, January.
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    More about this item

    Keywords

    debt sustainability; global financial crisis; fiscal policy; palop;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • 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

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