Assessment of the sustainability of a nation's positions using the countries of Central and East Europe as an example

R. Kopych

Economy and Forecasting, 2006, issue 2, 25-35

Abstract: The author analyses fiscal policy of the eight East European and Baltic countries as regards its financial sustainability. The article attempts to assess the possibilities to continue expansionist fiscal policy in the economies with a considerable budget deficit and high national debt. The author points out that meeting the Maastricht criteria just before joining the euro area creates additional difficulties. Sustainability of the financial position has been assessed empirically with the use of statistical tests for stationarity and co-integration. The author concludes that one can not solely relay on evolutionary solution of fiscal problems at the expense of speeding-up GDP growth rate or lowering the interest rate.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:eip:journl:y:2006:i:2:p:25-35

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