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Sustainability of Budget Deficits and Public Debt in Lebanon: A Stationarity and Co-Integration Analysis
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Simon Neaime
Published/Copyright:
April 1, 2004
This paper presents a thorough empirical analysis of fiscal developments in Lebanon over the past three decades. After an evaluation of major fiscal and monetary developments, the paper uses the Present Value Constraint framework to analyze whether debt and deficits are sustainable. Unit root and co-integration tests reveal that public debt in Lebanon is not sustainable. It is also shown that Lebanon could be heading towards a debt and exchange rate crisis, which could degenerate into a banking crisis similar to the one observed in Argentina, unless timely fiscal adjustment measures are introduced in the near future.
Published Online: 2004-4-1
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
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- Sources of Growth in Morocco: An Emperical Analysis in a Regional Perspective
- An Empirical Examination of Stability, Predictability, and Volatility of Middle Eastern and African Emerging Stock Markets
- Sustainability of Budget Deficits and Public Debt in Lebanon: A Stationarity and Co-Integration Analysis
- Purchasing Power Parity: Further Evidence and Implications
- Book Review
