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Author:
Marco Tronzano, Università degli Studi di Genova, Dipartimento di Economia e Metodi Quantitativi, Genova, Italia

Regime-Shift, Multicointegration and Fiscal Sustainability: Further Evidence on Poland (1999-2015)

Volume 71 - Issue 1, February 2018
(pp. 73-86)
JEL classification: C22, E62, H62
Keywords: Fiscal Sustainability, Regime-Shifts, Transition Economies, Poland, Cointegration, Multicointegration

Abstract

This paper reassesses the sustainability of fiscal policy in Poland, extending the analysis of Tronzano (forthcoming) to a multicointegration test allowing for regime shifts. The empirical evidence strongly rejects the existence of multicointegration, thus suggesting that Poland’s fiscal process is unsustainable in a stochastic environment. In line with my previous research and other recent applied literature on Poland, the main policy implications are twofold. First, a prosecution of the ongoing fiscal consolidation process is needed. Second, the above process should be implemented introducing a systematic response of fiscal policy to contingent disequilibria in public debt.


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)
www.ge.camcom.gov.it