Sustainability of a fiscal policy and a current account: a threshold cointegration approach for the G-7 countries
Bibliographic record
Abstract
This dissertation investigates the sustainability of the fiscal policies and current accounts of the G-7 countries. Sustainability implies---for example in the case of a fiscal policy---that total revenues and expenditures need to be cointegrated with cointegrating vector [1,-1]. Researchers have been using linear cointegration tools to tests for sustainability.;However, the idea of admitting the possibility of a change in regime in which the fiscal policy or current account was sustainable up until some date t and only after that date an unsustainable situation was introduced or vice versa has been in mind of researchers. The intuition behind this idea is that there are large political and transaction costs to adjust the fiscal policy or the current account back on a sustainable situation whenever disequilibria are present. Thus a "threshold" may exist, so that whenever the imbalance is "large" enough the adjustment is done.;The concept of threshold cointegration, which captures the previous idea of a long-run relationship turning "on" and "off", is discussed. A Monte Carlo study is presented to compare the power of the Engel and Granger, Johansen, Horvath and Watson, the ADF, Enders and Granger, and Berben and van Dijk cointegration tests when the true cointegrating error process follows a three-regime TAR. The results of the Monte Carlo study suggest that there is not a test that outperforms the others in all considered situations, and thus a set of tests has to be considered and base the decision on the consensus of the different tests.;After reviewing the econometric tools available, those tools are applied to the sustainability problem for the G-7 countries. It was found an unsustainable Italian fiscal policy. For Canada, France, Japan, the U.K., and the U.S. sustainable fiscal policies were found. Furthermore, evidence in favor of a non-linear behavior, and thus a costly adjustment, is found. On the other hand, the German current account was identified as not sustainable; meanwhile the other 6 countries present a sustainable current account. For the countries with sustainable current accounts no evidence in favor of a non-linear behavior was found.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.008 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.002 | 0.002 |
| Science and technology studies | 0.001 | 0.001 |
| Scholarly communication | 0.003 | 0.002 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.003 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".