Structural breaks and nonlinearity in US and UK public debts

This article investigates the short-term dynamics of public debts in the United States and the United Kingdom over more than four decades. We check for structural changes in the data and assess nonlinearity and switching-regime hypotheses using several linearity tests. Our findings point to multiple...

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Bibliographic Details
Published inApplied economics letters Vol. 20; no. 7; pp. 653 - 657
Main Authors Jawadi, Fredj, Sousa, Ricardo M.
Format Journal Article
LanguageEnglish
Published Taylor & Francis 01.05.2013
Routledge
Subjects
Dynamics
Economic instability
nonlinearity
Public debt
structural breaks
Structural change
U.S.A
United Kingdom
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Summary:This article investigates the short-term dynamics of public debts in the United States and the United Kingdom over more than four decades. We check for structural changes in the data and assess nonlinearity and switching-regime hypotheses using several linearity tests. Our findings point to multiple structural breaks due to economic downturns, oil shocks and financial and political instability. We also identify different regimes for which the adjustment is asymmetric and nonlinear, in particular, since 2003 and around the Great Recession.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2012.727967