Testing Intertemporal Budget Constraints : Fiscal Policy Sustainability in Bangladesh, India, and Pakistan

• 발행기관: 연세대학교 동서문제연구원
• 저자명: Uddin Alma Makoto Kakinaka Donghun Kim
• 간행물 정보: 『동서연구』제26권 2호, 59~86쪽, 전체 28쪽
• 주제분류: 사회과학 > 지역학
• 파일형태: PDF
• 발행일자: 2014.05.20

영문 초록

This study discusses fiscal sustainability in three South Asian countries (Bangladesh, India, and Pakistan) by empirically examining a long-term relationship between revenue and expenditure with the consideration of the intertemporal budget constraint. The conventional cointegration analysis without any structural break and the Gregory-Hansen cointegration analysis that allows a one-time structural break suggest that the Bangladesh fiscal policy could be sustainable, while fiscal stances of India and Pakistan are unsustainable. When considering the Lucas critique, this research also includes a time-variant coefficient (TVC) model with the Kalman filter. The analysis confirms the results of the conventional and Gregory-Hansen cointegration tests for Bangladesh and India but identifies possible sustainability of the fiscal stance for Pakistan.

키워드

Intertemporal budget constraint Fisical policy sustainability Government deficit and debt South Asian economy Inertemporal budget constraint Fisical policy sustainability