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dc.contributor.authorHolmes, Mark J.
dc.contributor.authorOtero, Jesús
dc.contributor.authorPanagiotidis, Theodore
dc.identifier.citationHomes, M.J., Otero, J. & Panagiotidis, T. (2010). Are EU budget deficits stationary? Empirical Economics, 38(3), 767-778.en_NZ
dc.description.abstractIn this paper, we test for the stationarity of European Union budget deficits over the period 1971–2006, using a panel of thirteen member countries. Our testing strategy addresses two key concerns with regard to unit root panel data testing, namely (1) the presence of cross-sectional dependence among the countries in the panel and (2) the identification of potential structural breaks that might have occurred at different points in time. To address these concerns, we employ an AR-based bootstrap approach that allows us to test the null hypothesis of joint stationarity with endogenously determined structural breaks. In contrast to the existing literature, we find that the EU countries considered are characterised by fiscal stationarity over the full sample period irrespective of us allowing for structural breaks. This conclusion also holds when analysing sub-periods based on before and after the Maastricht treaty.en_NZ
dc.publisherPhysica Verlagen_NZ
dc.subjectheterogeneous dynamic panelsen_NZ
dc.subjectfiscal sustainabilityen_NZ
dc.subjectmean reversionen_NZ
dc.subjectpanel stationarity testen_NZ
dc.titleAre EU budget deficits stationary?en_NZ
dc.typeJournal Articleen_NZ
dc.relation.isPartOfEmpirical Economicsen_NZ

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