Threshold Effects in the US Budget Deficit
				Cipollini AndreaFattouh BassamArestis Philip			
		
				CEIS Research Paper
		
				 We contribute to the debate on whether the US large federal budget deficits are sustainable in the long run. We model the US government deficit per capita as a threshold autoregressive process. We find evidence that the US budget deficit is sustainable in the long run and that economic policymakers will only intervene to reduce per capita deficit when it reaches a certain threshold.
		
				
		
	Number: 18
		
				Keywords:  Government Deficit, Threshold, Unit Root
		
				JEL codes:  C32, E62
		
		
		
				Date: Friday, May 23, 2003
		
				Revision Date: Friday, May 23, 2003