Logo
Munich Personal RePEc Archive

The Study of Public Debt. Which Are the Distinctions between the Emerging and Advanced Economies in the European Union?

Stoian, Andreea and Iorgulescu, Filip (2015): The Study of Public Debt. Which Are the Distinctions between the Emerging and Advanced Economies in the European Union? Published in: Empirica. Journal of European Economics , Vol. 43, No. 1 (2016): pp. 167-196.

This is the latest version of this item.

[thumbnail of MPRA_paper_63539.pdf]
Preview
PDF
MPRA_paper_63539.pdf

Download (836kB) | Preview

Abstract

The aim of our paper is to provide a comprehensive study of public debt in various aspects across the European Union,emphasizing the existing distinctions between the emerging and advanced economies in Europe. Using annual data ranging from 1995 to 2013 we develop investigation manifold. Firstly, we study the descriptive statistics of key variables affecting public debt dynamics. We found that the ex-communistcountries recorded lower public debt ratios, negative flow costs and primary deficits. By comparison, the advanced economies managed to run primary surpluses in order to balance larger public debt-to-GDP ratios and the positive flow cost. Secondly, using the accounting approach we analyzed the dynamics of public debt. The results indicated unstable dynamics for the cases of CzechRepublic, Latvia, Lithuania, Poland, Slovakia, Slovenia, Cyprus, France, Germany, Greece, Ireland, Italy, Malta, Portugal, Spain and the United Kingdom. Then, employing a logit model with fixed effects, we also showed that running primary deficits is more likely to increase the probability of having unstable dynamics of public debt. Thirdly, we examined the distribution of the flow cost and revealed that there is an increased probability of extreme values which, in the case of large debt ratios, might lead to high debt burdens for the European countries. We also found that the uncertainty of the future debt burden is driven by the variability of the real GDP growth rate.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.