Analysis of Public Debt in the Context of Crises Generated by Socio-Economic Events. Case Study: European Union Countries

Alin Vasile Strachinaru
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Alin Vasile Strachinaru: Alexandru Ioan Cuza University of Iași

Scientific Annals of Economics and Business (continues Analele Stiintifice), 2024, vol. 71, issue 4, 547 - 582

Abstract: In the current geopolitical configuration, generated by socio-economic and political-military events, with an impact on economic development, the public debt dynamics take on new dimensions. Public debt, as an indispensable concept for improving development strategies in an economic and geopolitical context, is influenced by the macroeconomic indicators’ variation, but also by the internal and external factors’ impact, which generate instability in a dynamic of unpredictable phenomena. Therefore, the study indicates proposals, based on multivariate regression, to capture the most sensitive variations of macroeconomic indicators on sustainable development at the European Union countries level. Moreover, the current European level configuration requires a detailed capture of the connection between public debt and economic growth, by using a VAR model (public debt, a concept that takes on new values in the current context, and economic growth, as the central pillar of sustainable development, analyzed from the perspective of the studied indicators fluctuation). Finally, I analyzed the public debt dynamics for the next period (2000 – 2022) to create a realistic picture, using the ARMA model. The results confirm the direct impact of each event on economic growth and development, and the limitation and elimination of negative effects vary depending on how it is managed and prevented. Also, the link between the economic growth and public debt is confirmed and, at the same time, it constitutes a benchmark that captures the importance of the decisions of the responsible factors regarding the financial-monetary instruments implemented or what is requested to be adopted. In other words, forecasting the public debt dynamics gives a certain stability, but also a strategic vision, offering viable solutions to support sustainable development efforts at European states level.

Keywords: autoregressive integrated moving average (ARMA); autoregressive model (VAR); macroeconomic indicators; public debt; regression. (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:aic:saebjn:v:71:y:2024:i:4:p:547-582:n:5

DOI: 10.47743/saeb-2024-0026

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