Testing Stationarity of Budgetary Position in Developing Countries
In this paper, we examine stationarity properties of data on budget deficits for a cluster of twenty-seven developing countries (D-27) for the period spanning 1970 to 2003. It has been argued in the literature that this statistical property correlates well with the economic property of sustainabili...
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| Format: | Article |
| Language: | English |
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Econometric Research Association
2009
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/7317/ http://ir.unimas.my/id/eprint/7317/1/Testing%20Stationarity%20of%20Budgetary%20Position%20in%20Developing%20Countries.pdf |
| _version_ | 1848836103363100672 |
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| author | Lau, Evan Ahmad Zubaidi, Baharumshah Shazali Abu, Mansor Puah, Chin-Hong |
| author_facet | Lau, Evan Ahmad Zubaidi, Baharumshah Shazali Abu, Mansor Puah, Chin-Hong |
| author_sort | Lau, Evan |
| building | UNIMAS Institutional Repository |
| collection | Online Access |
| description | In this paper, we examine stationarity properties of data on budget deficits for a cluster of twenty-seven developing countries (D-27) for the period spanning 1970 to 2003. It has been argued in the literature that this statistical property correlates well with the economic
property of sustainability of the budget deficit. The univariate unit root tests indicated a non-stationary process of I(1) with the exception of three countries. However, the nonstationary properties were rejected when the panel unit roots procedures were adopted. Since panel procedures provide greater power, the statistical evidence favors stationarity. This in turn suggests that budgets deficits in our sample of countries are sustainable, an important conclusion with many real world economic implications. The conflict between single country results and panel results suggests that univariate procedures may lead to the wrong conclusions. |
| first_indexed | 2025-11-15T06:18:26Z |
| format | Article |
| id | unimas-7317 |
| institution | Universiti Malaysia Sarawak |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T06:18:26Z |
| publishDate | 2009 |
| publisher | Econometric Research Association |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | unimas-73172016-04-14T07:03:30Z http://ir.unimas.my/id/eprint/7317/ Testing Stationarity of Budgetary Position in Developing Countries Lau, Evan Ahmad Zubaidi, Baharumshah Shazali Abu, Mansor Puah, Chin-Hong HA Statistics HB Economic Theory HC Economic History and Conditions In this paper, we examine stationarity properties of data on budget deficits for a cluster of twenty-seven developing countries (D-27) for the period spanning 1970 to 2003. It has been argued in the literature that this statistical property correlates well with the economic property of sustainability of the budget deficit. The univariate unit root tests indicated a non-stationary process of I(1) with the exception of three countries. However, the nonstationary properties were rejected when the panel unit roots procedures were adopted. Since panel procedures provide greater power, the statistical evidence favors stationarity. This in turn suggests that budgets deficits in our sample of countries are sustainable, an important conclusion with many real world economic implications. The conflict between single country results and panel results suggests that univariate procedures may lead to the wrong conclusions. Econometric Research Association 2009 Article PeerReviewed text en http://ir.unimas.my/id/eprint/7317/1/Testing%20Stationarity%20of%20Budgetary%20Position%20in%20Developing%20Countries.pdf Lau, Evan and Ahmad Zubaidi, Baharumshah and Shazali Abu, Mansor and Puah, Chin-Hong (2009) Testing Stationarity of Budgetary Position in Developing Countries. International Econometric Review (IER), 1 (2). pp. 77-87. ISSN 1308-8793 (print). 1308-8815 (online) http://core.ac.uk/download/pdf/6777592.pdf |
| spellingShingle | HA Statistics HB Economic Theory HC Economic History and Conditions Lau, Evan Ahmad Zubaidi, Baharumshah Shazali Abu, Mansor Puah, Chin-Hong Testing Stationarity of Budgetary Position in Developing Countries |
| title | Testing Stationarity of Budgetary Position in Developing Countries |
| title_full | Testing Stationarity of Budgetary Position in Developing Countries |
| title_fullStr | Testing Stationarity of Budgetary Position in Developing Countries |
| title_full_unstemmed | Testing Stationarity of Budgetary Position in Developing Countries |
| title_short | Testing Stationarity of Budgetary Position in Developing Countries |
| title_sort | testing stationarity of budgetary position in developing countries |
| topic | HA Statistics HB Economic Theory HC Economic History and Conditions |
| url | http://ir.unimas.my/id/eprint/7317/ http://ir.unimas.my/id/eprint/7317/ http://ir.unimas.my/id/eprint/7317/1/Testing%20Stationarity%20of%20Budgetary%20Position%20in%20Developing%20Countries.pdf |