Sustainability tests often ignore the joint dynamics of stock and flow variables. This paper shows that such a practice leads to inappropriate statistical inference, and that taking into account this joint dynamics when testing for unit root induces large power gains. This paper introduces a new...

This paper introduces a new unit root test, using "Feedback Covariates", in order to test for sustainability of fiscal policy within the G-7.Non-sustainability is considered as the null hypothesis of both a unit root in the debt process and the nullity of a deficit correction in response to...

This paper considers the consequences of employment protection with a fully diversified stock market when firms face a common shock. The analysis focuses on the interaction between employment protection and stock market when wages are sluggish or fixed. We build and calibrate a dynamic model...

This paper proposes a new testing strategy for unemployment hysteris as the joint restriction of a unit-root in the unemployment rate and no-effect of the level of unemployment in the Phillips wage equation. The relevant test statistics are derived when this joint restriction is imposed during...

The is a growing trend of criticism against the use of panel data unit root test for assessing hypotheses such as the purchasing power parity. The usual argument of a gain in power with respect to univariate unit root tests is not relevant as different nulls are involved when testing on panel...

Reforms of pension systems are currently engaged or considered -in many of the European countries, like in France. Alternative reforms not only involve different macroeconomic effects but also large distributive consequences both between ages, income or socio-economic groups. This paper uses a...