Fiscal convergence and sustainability in the European Union
https://doi.org/10.3326/pse.42.4.1 | Published online: December 14, 2018 Figure 1
Relative transition paths Table 1
log t convergence test results and convergence clubs classification
Note: The table presents γ coefficient from log t regression together with t-statistics.* Marks a rejection of convergence at 5% level. Numbers in brackets are number of countries in the club. Club classification is a result of the initial clustering algorithm. Final classification is a result after club merging. Final classification is presented only when club merging is significant. Countries that form different clubs are presented in figure 3.Figure 2
Rolling window estimation of log t regression Figure 3
Convergence clubs Note: Convergence clubs are in squares, non-convergent groups are in circles. Figure 4
β-convergence in clubs Table 2
Club convergence using unit root tests
Notes: Rejection rates of unit root hypothesis at 10% level of significance are reported in the table. Number of countries in a club is in brackets. The rejection rate is calculated as (# of rejections/ # of countries within a club)×100. Table 3
Results of fiscal sustainability analysis using system GMM-CCE model
Note: Standard errors in parentheses, ***, **, and * mark statistical significance at 1%, 5%, and 10% level. Model 1 is the benchmark model. Models 2 and 3 include countries from endogenous debt convergence clubs 1 and 2, respectively. Models 4 and 5 include EU-15 and EU-13 countries, and models 6 and 7 include subsamples with government debt ≥ 90% and debt < 90% of GDP, respectively. Table 4
Results of fiscal sustainability analysis using FE model
Note: Standard errors in parentheses, ***, **, and * mark statistical significance at 1%, 5%, and 10% level. Model 1 is the benchmark model. Models 2 and 3 includecountries from endogenous debt convergence clubs 1 and 2, respectively. Models 4 and 5 include EU-15 and EU-13 countries, and models 6 and 7 include subsamples with government debt ≥ 90% and debt < 90% of GDP, respectively.Figure A1
Government revenues and expenditures as a percent of GDP Figure A2
Primary surplus and government debt as a percent of GDP Table A1
Descriptive statistics
Figure 1 Relative transition paths DISPLAY Figure Table 1 log t convergence test results and convergence clubs classification DISPLAY Table Figure 2 Rolling window estimation of log t regression DISPLAY Figure Figure 3 Convergence clubs DISPLAY Figure Figure 4 β-convergence in clubs DISPLAY Figure Table 2 Club convergence using unit root tests DISPLAY Table Table 3 Results of fiscal sustainability analysis using system GMM-CCE model DISPLAY Table Table 4 Results of fiscal sustainability analysis using FE model DISPLAY Table Figure A1 Government revenues and expenditures as a percent of GDP DISPLAY Figure Figure A2 Primary surplus and government debt as a percent of GDP DISPLAY Figure Table A1 Descriptive statistics DISPLAY Table |
December, 2018IV/2018 |