Multicointegration and sustainability of fiscal practices

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2005-09-12

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Abstract

Using multicointegration methodology, we develop criteria for testing sustainability of fiscal budgeting processes across all states of nature. Criteria are derived from the optimal control literature where levels and rates of change of a system of variables are determinants of policy response. The appropriate policy response mechanisms are outlined and linked to the multicointegration methodology. We then test government spending and revenue systems of 15 industrialized countries for the presence of such mechanisms. We find that only Norway and the United Kingdom exhibit policy responses that are consistent with our criteria. © Western Economic Association International.

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10.1093/ei/cbi031

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Leachman, L, A Bester, G Rosas and P Lange (2005). Multicointegration and sustainability of fiscal practices. Economic Inquiry, 43(2). pp. 454–466. 10.1093/ei/cbi031 Retrieved from https://hdl.handle.net/10161/2076.

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Scholars@Duke

Leachman

Lori Leachman

Professor of the Practice Emerita of Economics

Professor Leachman is interested in studying the subjects of international trade, exchange rates, fiscal policy, and international macroeconomics. In conducting her research, she often incorporates intertemporal models, multicointegration and sustainability. Her current research project explores the political economy of intertemporal budgeting. She recently collaborated with G Rosas, A Bester, and P. Lange to complete a study on, “The Political Economy of Budget Deficits,” and worked with the same team on the project entitled, “Multicointegration and Sustainability of Fiscal Practices.” She has also teamed up with Bill Francis to publish the works, “Twin Deficits: Apparition or Reality?” and “Multicointegration Analysis and the Sustainability of Foreign Debt.” One of her earlier works, executed with Michael Thorpe, was a study on, “External Balance in the Small Open Economy of Australia.” She has also published on such subjects as capital market integration, optimum corporate capital structure, and Ricardian equivalence.

More recently, Dr. Leachman has turned her attention to creative writing. Specifically, she has written a memoir about growing up in the South, football, and her father's death from CTE. The book titled, "The King of Halloween and Miss Firecracker Queen," will be released in May of 2018. As a result of these efforts, Dr. Leachman is currently working on framing the legal and ethical issues surrounding football and the issue of informed consent.

Lange

Peter Lange

Thomas A. Langford University Distinguished Professor Emeritus

Professor of Political Science and Public Policy and former Provost (1999-2014) and Chair of the Political Science department (1996-1999). His principal interests are global higher education, comparative politics and political economy and twentieth century European politics. In addition to numerous articles, he is the author of Union Democracy and Liberal Corporatism: Exit, Voice and Wage Regulation in Postwar Europe, co-author of Unions, Change and Crisis: French and Italian Union Strategy and the Political Economy. He is also co-editor of Continuity and Change in Contemporary Capitalism, as well as Italy in Transition, State, Market and Social Regulation: New Perspectives on Italy. Prior to becoming Provost in 1999, his work  focused on the relationship between globalization, domestic politics and economic policy and performance in the advanced industrial democracies. He has taught at Harvard University and was a Research Fellow of the Center for European Studies there. He serves on the editorial board of several journals. In 1991-1992 he was a Fellow at the Center for Advanced Study in the Behavioral Sciences in Palo Alto, CA and in 1994 co-chaired a Summer Institute at the Center in "Internationalization and Domestic Performance in Postwar Europe", a follow-up to which was held in the summers of 1998 and 1999 in Palo Alto and Berlin. He was also Chair of the Joint Committee on Western Europe of the Social Science Research Council. He served as Vice-Provost for Academic and International Affairs at Duke from 1994-1996 and Chair of the Curriculum Review Committee for Arts and Sciences at Duke.


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