Hatzinikolaou, Dimitris; Simos, Theodore - In: Empirical Economics 45 (2013) 1, pp. 61-79
In this paper, we define deficit sustainability by requiring formally that both the discounted debt vanish asymptotically and the undiscounted debt be bounded. Thus, a new necessary condition and a new testing procedure emerge. We propose a new test statistic and prove that its limiting...
