Sustainability of US public debt: Estimating smoothing spline regressions
Greiner, Alfred
Greiner
Alfred
Kauermann, Göran
Kauermann
Göran
In this paper we analyze how the primary surplus to GDP ratio in the US reacts to variations in the public debt-GDP ratio. In contrast to earlier studies we perform non-parametric and semi-parametric estimations. Our results show that the response of the primary surplus to GDP ratio is a positive nonlinear function of the public debt-GDP ratio. Further, our estimations demonstrate that the coefficient giving the response of the primary surplus-GDP ratio to a change in the public debt-GDP ratio declines over time when we assume a linear model with time dependent coefficients. (c) 2006 Elsevier B.V. All tights reserved.
24
2
350-364
350-364
ELSEVIER SCIENCE BV
2007