Public Debt Sustainability in Europe and Leading Countries

Bodo Herzog and Larissa Dausch

Journal of Empirical Economics, 2015, vol. 4, issue 4, 207-215

Abstract: We investigate public debt sustainability in Europe and leading industrialised countries. The recent debate about the debt ceiling in the US and the sovereign debt crisis in Europe demonstrate the urgency of the topic. We measure debt sustainability of public finance with a standard and alternative methodology and compare both results. We use panel data of 205 OECD countries from 1970 to 2014. The paper finds unsustainable public debt levels for almost all countries in the past decades. Furthermore, given the low economic growth and demographic challenge ahead, debt levels may upsurge even more. There is a huge looming ‘debt meltdown’ on the horizon if countries do not change public policy soon.

Keywords: Public Debt Sustainability; Measurement of Sustainability; European Debt Crisis (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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