Assessing Sustainability of the Irish Public Debt

Kumar, Saten and Paradiso, Antonio (2011): Assessing Sustainability of the Irish Public Debt.

Abstract

This paper utilizes a small-scale econometric model to study the dynamics of the Irish debt-to-GDP ratio. The role of world GDP growth, domestic GDP growth, real effective exchange rate, interest rate and primary balance is analyzed in the debt dynamics. We find that the Irish economy will recover to its normal path by 2015. Policy interventions for higher primary balance and output growth, and the external positive scenarios for variables such as the world GDP growth, rate of interest and real effective exchange rate are desirable to help further reduce the debt path.

• Item Type: MPRA Paper
• Language: English
• Keywords: Debt to GDP ratio; Irish economy; Sustainability
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; H - Public Economics > H6 - National Budget, Deficit, and Debt > H68 - Forecasts of Budgets, Deficits, and Debt; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C30 - General; H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt ; Debt Management ; Sovereign Debt

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