Sustainability of public debt: a theoretical and empirical investigation

Lucian Liviu Albu () and Elena Pelinescu

MPRA Paper from University Library of Munich, Germany

Abstract: At the beginning of the transition period, the public debt in Romania was insignificant. However, during the following years, the accumulating process accelerated. Although the indebtedness degree continues to be smaller than registered levels in other European countries, more dangerous could be its accelerating trend in conditions of some not so very high-performing macroeconomic policy management. The present study attempts to answer certain problems related to the governing mechanism of the public debt accumulation. Particularly, it examines: a) some significant implications of the public sector deficits on the dynamics of the main macroeconomic indicators; b) certain factors having impact on sustainability degree; and c) possibilities for setting up fundamental parameters and a time horizon to stop the debt accumulation process. Certain plausible hypotheses will be selected and some likely evolutions will be simulated.

Keywords: public debt; sustainability function; primary deficit; interest rate (search for similar items in EconPapers)
JEL-codes: C51 O16 P27 F41 C15 E44 H68 (search for similar items in EconPapers)
Date: 2000-01
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:14364

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