Structual Break: Tests of the Present-Value Government Borrowing Constraint and Stability of Debt-GDP Ratio in the UK: 1970-2000

In this paper we argue that allowance for structural breaks (Perron, 1989, Zivot and Andrews, 1992) in the relevant time–series can provide more accurate tests of the present–value borrowing constraint (Hamilton and Flavin, 1986) by accommodating any changes in the processes generating budget deficits and alterations in fiscal policies. Our results confirm that the UK government has satisfied the present value constraint during the period 1992–2000.

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Year of publication:	2001
Authors:	Ghatak A.
Published in:	European Research Studies Journal. - European Research Studies Journal. - Vol. IV.2001, 3-4, p. 37-54
Publisher:	European Research Studies Journal
Subject:	Hamilton and Flavin Stationarity \| Structural Breaks \| Cointegration Stability Perron Zivot and Andrews

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Extent:	application/pdf
Type of publication:	Article
Classification:	H61 - Budget; Budget Systems ; H62 - Deficit; Surplus ; C22 - Time-Series Models ; C52 - Model Evaluation and Testing ; O52 - Europe
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008478750