Limita datoriei, spatiul fiscal si riscul oboselii fiscale in tarile Europei Centrale si de Est ale UE

Aurel Iancu and Dan Olteanu

Studii Economice from Institutul National de Cercetari Economice (INCE)

Abstract: This study analyzes the correlation between the primary budget balance and the public debt during the last two decades, for a panel of 12 countries from Central and Eastern Europe, in order to assess their debt sustainability, the level of debt at which fiscal fatigue may occur, as well as the degree of risk for fiscal fatigue, depending on the past and future evolution of the public debt. First, using estimates of the cubic fiscal reaction function and two variants (quadratic / linear) of the financing cost function, we determined the equilibrium level of public debt as % of GDP, the ”fiscal fatigue” point and the debt limit, for the whole panel and each country. Second, using the common (from panel regressions) and country-specific coefficients, and public debt projection for 10 and 5 years, we evaluated the risk level of fiscal fatigue, in relation to the future evolution of the public debt and other financial indicators.

Keywords: primary balance; public debt; fiscal space; fiscal policy (search for similar items in EconPapers)
JEL-codes: E62 H61 H62 H63 H68 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022-12
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:ror:seince:221215

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