Heiko T. Burret, Lars P. Feld, Ekkehard A. Köhler

Fiscal Sustainability of the German Länder: Time-Series Evidence

Section: Articles
FinanzArchiv (FA)

Volume 73 () / Issue 1, pp. 103-132 (30)

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We analyze the sustainability of public finances in the 16 states (Länder) of the Federal Republic of Germany, using an unprecedentedly comprehensive fiscal data set covering the period from 1950 to 2011 for West German Länder and from 1991 to 2011 for East German Länder. We extend the existing literature in that we apply unit-root and stationarity tests not only to debt but also to expenditure and revenue and explore their long-run relation in cointegration analyses for each Land. The results provide evidence against strict fiscal sustainability in a majority of German Länder. A notable exception to this finding is Bavaria.

Heiko T. Burret No current data available.

Lars P. Feld ist Direktor des Walter Eucken Instituts Freiburg, Inhaber des Lehrstuhls für Wirtschaftspolitik und Ordnungsökonomik an der Albert-Ludwigs-Universität Freiburg.

Ekkehard A. Köhler Geboren 1979; 2006 Diplom-Volkswirt; seit 2009 Forschungsreferent am Walter Eucken Institut Freiburg; 2015 Promotion; seit 2016 geschäftsführender Forschungsreferent am Walter Eucken Institut Freiburg.