Debt and fiscal sustainability in Barbados

Author(s): Archibald, Xiomara; Greenidge, Kevin C (2002)

Created 22 Jul, 2002
Categories Working Papers
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The question of debt and fiscal sustainability is very important for adequate macroeconomic management. This paper looks at the sustainability of the Government of Barbados' policies with respect to the financing of public expenditure and debt management in the post-independence era. In this regard, cointegration testing of the present value budget constraint - using both fixed and time varying coefficients - was the main tool of the empirical analysis of the sustainability of the historical fiscal process. The findings suggest that this process has, in fact, been sustainable and point to prudent public sector policies by fiscal authorities.

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