Roberto Ricciuti (2004) A Non-Linear Characterisation of Fiscal Sustainability.
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In this paper we characterise fiscal policy in terms of non-linear processes. We find that government spending and taxes can be described as being non-linear trend stationary processes instead of unit roots. A long run equilibrium relationship - a non-linear co-trend - does exist between the two series, fulfilling the intertemporal government budget constraint. We use Italian data spanning from 1861 to 1998.
This is a Accepted version This version's date is: 2004 This item is not peer reviewed
https://repository.royalholloway.ac.uk/items/870daedd-c4aa-aa6b-a3ae-e186a8441c40/1/
Deposited by Leanne Workman (UXYL007) on 12-Oct-2012 in Royal Holloway Research Online.Last modified on 12-Oct-2012
©2004 Roberto Ricciuti. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit including © notice, is given to the source.