Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300296 
Year of Publication: 
2023
Series/Report no.: 
Working Papers No. 230629
Publisher: 
Romanian Academy, National Institute for Economic Research, Bucharest
Abstract: 
This study analyzes the correlation between the primary budget balance and the public debt over 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 of fiscal fatigue, depending on the past and future evolution of 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 percentage of GDP, the" fiscal fatigue" point and the debt limit, for the whole panel and for each country. Second, by using the common (from panel regressions) and country-specific coefficients, and public debt projection for 10 and 5 years, we evaluated the level of risk for fiscal fatigue, in relation to the future evolution of public debt and other financial indicators.
Subjects: 
primary balance
public debt
fiscal space
fiscal policy
JEL: 
H61
H62
H63
H68
E62
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.