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National Debt Neutrality: Some International Evidence
Author(s) -
Koskela Erkki,
Virén Matti
Publication year - 1983
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1983.tb00003.x
Subject(s) - neutrality , economics , context (archaeology) , debt , weighting , empirical evidence , econometrics , consumption (sociology) , government (linguistics) , macroeconomics , monetary economics , public economics , political science , paleontology , social science , philosophy , linguistics , radiology , epistemology , sociology , biology , law , medicine
SUMMARY This paper contains ‐ in the context of consumption behavior – some empirical tests for the debt neutrality hypothesis. According to this hypothesis, the tax/debt financing mix of government spending does not matter. The large international cross section‐time series data from OECD countries lends no support to the coefficient restrictions implied by the debt neutrality hypothesis. This result turns out to be robust with respect to various ways of measuring the public sector deficit variable, to weighting patterns, to additional variables, to various data samples and to estimation methods.