The present paper considers Dickey-Fuller-type unit root tests which account for a structural break occurring at an unknown point in time. The break is modelled by an innovational outlier approach. Provided that the break date is estimated correctly, the exact invariance to a mean and a slope...

We analyze public debt sustainability in Serbia between 2004Q3 and 2014Q3. The results of our analysis are: i) public debt to GDP ratio is on unsustainable path, according to the results of unit root tests; ii) the response of primary fiscal balance to public debt accumulation is insufficient to...