Article ID Journal Published Year Pages File Type
5052862 Economic Analysis and Policy 2010 8 Pages PDF
Abstract

The study provides new evidence on the sustainability debate concerning the US budget balance. Existing studies are often only able to reject non-cointegration between government expenditure and revenue once structural breaks or regime changes are allowed for. Using a testing procedure advocated by Bierens, this study provides a different perspective on this issue. Government expenditure and revenue are both found to be stationary around a nonlinear deterministic trend, and they are co-trended insofar as they share a common nonlinear deterministic trend.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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