Government budget deficits and trade deficits Are present value constraints satisfied in long-term data?

• 成果类型: Article
• 署名作者: Ahmed, S; Rogers, JH
• 署名单位: Federal Reserve System - USA; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/0304-3932(95)01215-X
• 发表日期: 1995
• 页码: 351-374
• 关键词: intertemporal budget constraints; government budget and trade deficits; Structural Breaks

摘要

We test whether long-term data from the U.S. and U.K. are consistent with the intertemporal government budget constraint and external borrowing constraint, both individually and simultaneously. A very strong test is provided by our focus on whether the present value constraints (PVCs) continue to hold despite unusual events, such as wars, that cause a structural break in the short-run dynamic behavior of the variables. We find that the PVCs hold over the whole sample period. The data also indicate that the PVCs continue to hold following events that cause a structural break in the short-run dynamics.