HAL will be down for maintenance from Friday, June 10 at 4pm through Monday, June 13 at 9am. More information
Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Fiscal policy in the US : Ricardian after all ?

Abstract : Historical data on US debt and primary surplus suggest the existence of different fiscal regimes which imply that, from time to time, US fiscal policy may have violated the government’s intertemporal budget constraint. But does evidence of locally unsustainable regimes eventually jeopardize the global sustainability of US public debt? We apply a Regime-Switching Model-Based Sustainability test which derives sufficient conditions on a regime-switching fiscal policy feeback rule such that fiscal policy can globally be sustainable while allowing for persistent unsustainable regimes. We find significant evidence of a globally Ricardian US fiscal policy, despite periodic and persistent unsustainable fiscal regimes. This conclusion remains valid after controlling for the reverse causality between the primary balance and the output gap.
Document type :
Preprints, Working Papers, ...
Complete list of metadata

https://hal-sciencespo.archives-ouvertes.fr/hal-03458503
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Tuesday, November 30, 2021 - 9:15:14 PM
Last modification on : Friday, March 25, 2022 - 3:58:28 AM

File

wp2017-23-fiscalpolicy-paldama...
Files produced by the author(s)

Identifiers

Collections

Citation

​pierre Aldama, Jérôme Creel. Fiscal policy in the US : Ricardian after all ?. 2017. ⟨hal-03458503⟩

Share

Metrics

Record views

1

Files downloads

4