Assessing Sustainability of the Irish Public Debt

Saten Kumar and Antonio Paradiso

MPRA Paper from University Library of Munich, Germany

Abstract: This paper utilizes a small-scale econometric model to study the dynamics of the Irish debt-to-GDP ratio. The role of world GDP growth, domestic GDP growth, real effective exchange rate, interest rate and primary balance is analyzed in the debt dynamics. We find that the Irish economy will recover to its normal path by 2015. Policy interventions for higher primary balance and output growth, and the external positive scenarios for variables such as the world GDP growth, rate of interest and real effective exchange rate are desirable to help further reduce the debt path.

Keywords: Debt to GDP ratio; Irish economy; Sustainability (search for similar items in EconPapers)
JEL-codes: C30 E62 H63 H68 (search for similar items in EconPapers)
Date: 2011-12-05
New Economics Papers: this item is included in nep-mac
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