Public debt sustainability and endogenous seigniorage in Brazil: time-series evidence from 1947–1992

In this paper, we investigate three central issues in public finance. First, was the path of public debt sustainable during 1947–1992? Second, how has the government balanced the budget after shocks to either revenues or expenditures were observed? Third, are expenditures exogenous? The results show...

Full description

Saved in:
Bibliographic Details
Published inJournal of development economics Vol. 62; no. 1; pp. 131 - 147
Main Authors Issler, João Victor, Lima, Luiz Renato
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.06.2000
Elsevier
North-Holland Pub. Co
Elsevier Sequoia S.A
SeriesJournal of Development Economics
Subjects
Budgeting
Econometrics
Economic models
Economic theory
Federal budget
Government-debt sustainability
National debt
Statistical analysis
Studies
Tax assessments
Unit-root and co-integration tests
Brazil
Unit-root and co-integration tests
C3
Government-debt sustainability
H3
H6
Online AccessGet full text

Cover

More Information
Summary:In this paper, we investigate three central issues in public finance. First, was the path of public debt sustainable during 1947–1992? Second, how has the government balanced the budget after shocks to either revenues or expenditures were observed? Third, are expenditures exogenous? The results show that (i) debt is sustainable in econometric tests, with the budget being balanced almost entirely through changes in taxes, regardless of the cause of the initial imbalance. Expenditures are weakly exogenous; (ii) the behavior of a “rational” Brazilian consumer may be consistent with Ricardian Equivalence; (iii) seigniorage revenues are critical in restoring intertemporal budget equilibrium.
ISSN:0304-3878
1872-6089
DOI:10.1016/S0304-3878(00)00078-X