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An Empirical Study on Public Debit in Romania

Author

Listed:
  • NICOLETA GEORGETA PANAIT

    (Faculty of Economic and Business Administration Nicolae Titulescu University, Bucharest)

  • COSTIN ALEXANDRU PANAIT

    (Faculty of Economics and Business Administration University of Craiova)

Abstract

This paper states that public debt can be defined as an amount that a country owes to creditors outside themselves, but also to individuals, businesses and even other governments. The term "public debt" is used interchangeably with the term sovereign debt. The study presents a brief analysis of the evolution of public debt in Romania for the past years. The issue of public debt sustainability is an important factor in the development of policies aimed at reducing the volatility of volatile capital markets, the economic policy of Romania should be focused on the gross GDP growth. Public debt is sustainable when state authorities have the ability to repay public debt service to creditors without having to make future adjustments to budget revenues and expenditures. The public debt has a negative effect on economic growth, heavily indebted countries being exposed to the risk of capital outflows or of the rapidly deteriorating position of public finances in the context of an economic and financial crisis. Emerging economies cannot sustain the same debt level as a share of GDP, that countries with advanced economies can manage, but a much lower one, mainly because of the limited access to capital markets of the countries from the former category.

Suggested Citation

  • Nicoleta Georgeta Panait & Costin Alexandru Panait, 2018. "An Empirical Study on Public Debit in Romania," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 6(1), June.
    • Handle: RePEc:ntu:ntugeo:vol6-iss1-18-137
    as

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    References listed on IDEAS

    as
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    3. Benjamin Bental & Dominique Demougin, 2006. "Incentive Contracts And Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 1033-1055, August.
    4. Tatiana Moşteanu & Mirela Anca Postole & Rodica Gherghina, 2011. "The Analysis Of External And Internal Public Debt In Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 5(5(558)(su), pages 501-508, July.
    5. Gheorghe Zaman & George Georgescu, 2010. "Romania’s External Debt Sustainability Under Crisis Circumstances," Romanian Journal of Economics, Institute of National Economy, vol. 30(1(39)), pages 5-38, June.
    Full references (including those not matched with items on IDEAS)

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