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Empirica

pp 1–24 | Cite as

Public finances in the EU-27: Are they sustainable?

  • Juan Carlos Cuestas
  • Luis A. Gil-Alana
  • Laura Sauci
Original Paper

Abstract

In this paper we aim to analyse the degree of mean reversion of public expenditure, revenue and the difference between them, over GDP for 27 European Union (EU) countries. To gain flexibility in the analysis of the order of integration of the variables we apply fractional integration techniques. In general, we find evidence of mean reversion in all countries.

Keywords

Public revenues Public expenditures Fractional integration 

JEL Classification

C32 E62 H60 

Notes

Acknowledgements

Juan Carlos Cuestas and Luis Gil-Alana gratefully acknowledge the financial support from the research Grant ECO2017-83255-C3-3-P and ECO2017-85503-R ‘Programa Estatal de Fomento de la Investigación, Científica y Técnica de Excelencia, Subprograma Estatal de Generación de Conocimiento, Ministerio de Economía, Industria y Competitividad (MINEIC), Gobierno de España, 2018–2020’. Comments from an anonymous referee and the editor are gratefully acknowledged. The usual disclaimer applies.

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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Eesti Pank and Tallinn University of TechnologyTallinnEstonia
  2. 2.Jaume I UniversityCastellón de la PlanaSpain
  3. 3.Faculty of Economics and ICS (NCID)University of NavarraPamplonaSpain
  4. 4.University of HuelvaHuelvaSpain

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