Have Public Finances in the OECD Area Been Sustainable?
The aim of this article is to test, from an empirical standpoint, the existence of sustainable public finances in the Organisation for Economic Co-operation and Development (OECD) area as a whole, over the most recent period of the world economy, 1973-2016. The research methods include not only stan...
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| Format: | Article |
| Language: | English |
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Riga Technical University Press
2018-03-01
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| Series: | Economics and Business |
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| Online Access: | https://doi.org/10.1515/eb-2018-0003 |
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| author | Ferraz Ricardo |
| author_facet | Ferraz Ricardo |
| author_sort | Ferraz Ricardo |
| collection | DOAJ |
| description | The aim of this article is to test, from an empirical standpoint, the existence of sustainable public finances in the Organisation for Economic Co-operation and Development (OECD) area as a whole, over the most recent period of the world economy, 1973-2016. The research methods include not only standard stationarity tests, but also tests, which allow for a structural break. The relevant results of this research are a stationary public budget balance expressed as a percentage of GDP and a debt to GDP ratio that is stationary in first differences. According to the literature, this means that a “necessary and sufficient” condition is fulfilled for proving the existence of a strong sustainability. We hope this research can make a valuable contribution to the debate regarding public finances in the world economy. To obtain other relevant conclusions, additional tests will need to be performed in the future in order to assess which members are contributing to the fiscal sustainability of the OECD aggregate. |
| format | Article |
| id | doaj-art-0a2cff9cbdd049df9da8853bbd287f7b |
| institution | Kabale University |
| issn | 1407-7337 2256-0394 |
| language | English |
| publishDate | 2018-03-01 |
| publisher | Riga Technical University Press |
| record_format | Article |
| series | Economics and Business |
| spelling | doaj-art-0a2cff9cbdd049df9da8853bbd287f7b2024-12-02T08:47:39ZengRiga Technical University PressEconomics and Business1407-73372256-03942018-03-01321365010.1515/eb-2018-0003eb-2018-0003Have Public Finances in the OECD Area Been Sustainable?Ferraz Ricardo0Lisbon School of Economics & Management, University of Lisbon (ISEG), Lisbon, PortugalThe aim of this article is to test, from an empirical standpoint, the existence of sustainable public finances in the Organisation for Economic Co-operation and Development (OECD) area as a whole, over the most recent period of the world economy, 1973-2016. The research methods include not only standard stationarity tests, but also tests, which allow for a structural break. The relevant results of this research are a stationary public budget balance expressed as a percentage of GDP and a debt to GDP ratio that is stationary in first differences. According to the literature, this means that a “necessary and sufficient” condition is fulfilled for proving the existence of a strong sustainability. We hope this research can make a valuable contribution to the debate regarding public finances in the world economy. To obtain other relevant conclusions, additional tests will need to be performed in the future in order to assess which members are contributing to the fiscal sustainability of the OECD aggregate.https://doi.org/10.1515/eb-2018-0003organisation for economic co-operation and development (oecd) areapublic debtpublic budgetsustainable public finances |
| spellingShingle | Ferraz Ricardo Have Public Finances in the OECD Area Been Sustainable? Economics and Business organisation for economic co-operation and development (oecd) area public debt public budget sustainable public finances |
| title | Have Public Finances in the OECD Area Been Sustainable? |
| title_full | Have Public Finances in the OECD Area Been Sustainable? |
| title_fullStr | Have Public Finances in the OECD Area Been Sustainable? |
| title_full_unstemmed | Have Public Finances in the OECD Area Been Sustainable? |
| title_short | Have Public Finances in the OECD Area Been Sustainable? |
| title_sort | have public finances in the oecd area been sustainable |
| topic | organisation for economic co-operation and development (oecd) area public debt public budget sustainable public finances |
| url | https://doi.org/10.1515/eb-2018-0003 |
| work_keys_str_mv | AT ferrazricardo havepublicfinancesintheoecdareabeensustainable |