UK Debt Sustainability: Some Nonlinear Evidence and Theoretical Implications
نویسندگان
چکیده
This paper assesses whether the UK public finances were sustainable for the period 1919 to 2001 using a nonlinear representation of the debt to GDP ratio and thus provides a more robust test of debt sustainability. Empirical evidence supports debt sustainability. Moreover, the ESTAR representation is evidence that sustainability is the result of active debt management rather than tax-smoothing. The results strongly support the active debt management hypothesis for the UK. JEL Classification: E62, C22
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