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CEEC vs. PIGS: a comparative panel assessment of financial sustainability and twin deficits

Author

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  • Alberto Bagnai

    () (University of Pescara)

Abstract

This paper analyses the relation between the external and government deficits in a panel of CEEC economies and, separately, in PIGS economies. We first assess by panel unit root tests whether the fiscal and external intertemporal budget constraints hold, and then examine the role of public and private expenditure in the dynamics of external indebtedness by panel regression. The results show the importance of private capital flows in the current external imbalances of European countries, with different implications for the two groups of countries considered.

Suggested Citation

  • Alberto Bagnai, 2010. "CEEC vs. PIGS: a comparative panel assessment of financial sustainability and twin deficits," Working Papers LuissLab 1088, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    • Handle: RePEc:lui:lleewp:1088
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    File URL: http://static.luiss.it/RePEc/pdf/lleewp/1088.pdf
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. A Biagio su Modigliani e la BCE
      by Alberto Bagnai in Goofynomics on 2016-03-06 22:43:00

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    Cited by:

    1. Janusz Sawicki, 2012. "Preserving EMU Depends on Success of ESM in Solving the Debt Crisis," Gospodarka Narodowa, Warsaw School of Economics, issue 10, pages 1-22.

    More about this item

    Keywords

    current account; budget deficit; panel data; twin deficits.;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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