Structural Breaks and Nonlinearity in US and UK Public Debt

Fredj Jawadi and Ricardo Sousa

No 25/2012, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: This paper investigates the short-term dynamics for public debts in the US and the UK over more than four decades. We check for structural changes in the data and assess nonlinearity and switching-regime hypotheses using several linearity tests. Our findings point to multiple structural breaks due to economic downturns, oil shocks, and financial and political instability. We also identify different regimes for which the adjustment is asymmetric and nonlinear, in particular, since 2003 and around the Great Recession.

Keywords: Public debt; structural breaks; nonlinearity. (search for similar items in EconPapers)
JEL-codes: C22 H6 (search for similar items in EconPapers)
Date: 2012
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Related works:
Journal Article: Structural breaks and nonlinearity in US and UK public debts (2013)
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