THE PUBLIC DEBT OF COUNTRIES FROM EURO ZONE. THE SNOWBALL EFFECT

Andrei Radulescu
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Andrei Radulescu: Senior Investment Analyst, SSIF Broker

Studii Financiare (Financial Studies), 2012, vol. 16, issue 3, 95-103

Abstract: Five years after the start of the worst financial and economic crisis since the end of the World War II the euro area countries are confronted with the persistence of the public debt crisis. The recent literature on macro-financial topics identifies the main factors that determined the launch of the sovereign debt crisis in Europe. One of the consequences of this crisis consists in the public debt effect. Several European countries pay an interest rate higher than the nominal GDP rate, leading to a snowball effect for the public debt. This short article reviews the main factors that determined the launch of the sovereign debt crisis and computes the public debt effect for the Euro Zone (12) member countries.

Keywords: public debt crisis; snowball effect; Euro Zone; interest rate spread (search for similar items in EconPapers)
JEL-codes: E43 E62 G12 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:vls:finstu:v:16:y:2012:i:3:p:95-103

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