Zaman, Gheorghe and Georgescu, George (2011): Sovereign risk and debt sustainability: warning levels for Romania. Published in: Non-Linear Modelling in Economics. Beyond Standard Economics (March 2011): pp. 234-270.
Download (269Kb) | Preview
Despite the governments took rescue and/or stimulus packages, signs of recovery occurring in 2009 and 2010, the global growth sustainability seems uncertain. Romania was hit hard by the crisis, suffering a severe contraction of the economy, estimated at 7.1 percent in 2009. The worsening of the external and internal financial framework of Romania and the danger of a currency market crisis urged the need for a financing agreement with IMF. The study shows that an excessive burden of external debt compared with financing resources needed to comply with the external payments obligations would maintain Romania on the brink of default risk. Collateral risks associated with unfavorable developments of Eurozone and also with pressures coming from a non-restructured public debt could make the default situation even unavoidable.
|Item Type:||MPRA Paper|
|Original Title:||Sovereign risk and debt sustainability: warning levels for Romania|
|Keywords:||financial crisis; global recession; anti-crisis measures; public debt; debt sustainability; sovereign risk|
|Subjects:||C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General
G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy
H - Public Economics > H6 - National Budget, Deficit, and Debt > H68 - Forecasts of Budgets, Deficits, and Debt
H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt; Debt Management; Sovereign Debt
G - Financial Economics > G0 - General > G01 - Financial Crises
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E47 - Forecasting and Simulation: Models and Applications
|Depositing User:||George Georgescu|
|Date Deposited:||22. Aug 2011 02:02|
|Last Modified:||12. Feb 2013 10:33|
Albu, L. L. (2008), A simulation model of public debt sustainability, MPRA Paper No. 11713, Munich.
Arnone M., Bandiera L., Presbitero A.F. (2005), External Debt Sustainability: Theory and Empirical Evidence, Catholic University of Economics, Piacenza.
Catao, L. A., Kapur S. (2006), Volatility and the Debt-Intolerance Paradox, IMF Staff Papers, International Monetary Fund, Vol. 53(2).
Clements B., Bhattacharya R., Nguyen T. Q. (2003), External Debt, Public Investment and Growth in Low-Income Countries, WP/03/249, International Monetary Fund.
Cline W. R. (2007) Why the US External Imbalance Matters, Cato Journal, Vol. 27, No. 1 (Winter 2007).
Cole, H. L., Kehoe P. J. (1998), Models of Sovereign Debt: Partial versus General Reputations, International Economic Review, vol. 39(1).
Das U., Papaioannou M., Trebesch C. (2010) Sovereign Default Risk and Private Sector Access to Capital in Emerging Markets, IMF Working Paper WP/10/10.
Ferrero A. (2007) The Long-Run Determinants of the U.S. External Imbalances, Staff Report no. 295, Federal Reserve Bank of New York, July.
Flassbeck H., Panizza U. (2008), Debt Sustainability and Debt Composition, UNCTAD Paper.
Geithner T. F. (2006) Policy Implications of Global Imbalances. Remarks at the Global Financial Imbalances Conference at Chatham House, London, 23 January.
Georgescu G. (2007), Current Account Deficits and Implications on Country Risk of Romania, Romanian Journal for Economic Forecasting, No 4/2007, Expert Publishing House.
Ghosh A. R., Chamon M. et al. (2009), Coping with the Crisis: Policy Options for Emerging Market Countries, IMF Research Department, April 23.
Gray D., Lim C. H., Loukoianova E., Malone S. (2008), A Risk-Based Debt Sustainability Framework: Incorporating Balance Sheets and Uncertainty, IMF WP/08/40, International Monetary Fund.
Hennessy C. A. (2004), Tobin Q’s, Debt Overhang and Investment, The Journal of Finance, Vol. LIX, No 4.
Hull J. C. (2009), The Credit Crunch of 2007: What Went Wrong? Why? What Lessons Can Be Learned?, University of Toronto, May.
Kregel J. (2007), Rethinking debt sustainability in the context of the millennium development goals, BNL Quarterly Review, vol. LX, no. 242.
Lester J., Bovenzi J. (2010) The Dodd-Frank Act. What it does, what it means, and what happens next, Financial Services, MMC, New York, July. Manasse P., Roubini N., Schimmelphenning A. (2003), Predicting Sovereign Debt Crisis, IMF Working Paper No. 03/221, International Monetary Fund, New York.
Mendoza E., Oviedo M. (2003), Public Debt, Fiscal Solvency and Macroeconomic Uncertainty in Emerging Markets, IADB.
Moschovis G., Servera M. C. (2009) External imbalances of the Greek economy: the role of fiscal and structural policies, ECFIN Country Focus, Vol. VI, Issue 6, E.C., Bruxelles, July.
Mussa M. (2005) Sustaining Global Growth while Reducing External Imbalances (pp 175-209) in Vol. The United States and the World Economy. Foreign Economic Policy for the Next Decade, Institute for International Economics, Washington.
Pattillo C., Poirson H., Ricci L. (2004), What Are the Channels Through Which External Debt Affects Growth?, IMF WP/04/15, International Monetary Fund.
Portugal M. (2010) Living in a New World of Heightened Sovereign Risks, IMF Forum Managing Sovereign Balance Sheet Risks in Turbulent Times, Stockholm, Sweden, 1-2 July.
Rajan R. (2005) Global Current Account Imbalances: Hard Landing or Soft Landing, Crйdit Suisse First Boston Conference, Hong Kong, 15 March.
Rato R. (2006) The Changing Role of the IMF in Asia and the Global Economy, IMF, Washington, 14 June.
Reinhart, C. M., Rogoff K. S., Savastano M. A. (2003), Debt Intolerance, Brookings Papers on Economic Activity, Vol. 1.
Reinhart C. M., Rogoff K. S. (2009) This Time is Different: A Panoramic View of Eight Centuries of Financial Crises, Princeton University Press, 16 April.
Rocher E. (2007), New borrowing post-debt relief: risks and challenges for developing countries, CFA Bulletin Digest No. 159.
Wermuth D. (2005) BIS wonders how the world’s financial imbalances will eventually be resolved, WAM, 6 July. Zaman G., Georgescu G. (2009), Crise financière: causes, effets, remèdes, Les Annales de l’Université Valahia de Târgovişte, Section : Sciences Economiques, XVIeme Annee, No.28, Editura Bibliotheca.
Zaman G., Georgescu G. (2009), Structural Fund Absorption: A New Challenge Romania?, Romanian Journal of Economic Forecasting, No 1/2009, Expert Publishing House.
Zaman G., Georgescu G. (2010), Romania’s External Debt Sustainability under Crisis Circumstances, Romanian Journal of Economics, No 1/2010, Expert Publishing House.
Zaman G., Goschin Z. (2010), Technical Change as Exogenous or Endogenous Factor in the Production Function Models. Empirical Evidence from Romania, Romanian Journal for Economic Forecasting, No 2/2010, Expert Publishing House.