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Changes in sovereign debt dynamics in Central and Eastern Europe

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  • Juan Carlos Cuestas

Abstract

The aim of this paper is to shed some light on the degree of sustainability of fiscal debt for a group of Central and Eastern European countries. We apply a battery of time series econometrics methods to show how the financial crisis has affected the debt‐to‐gross domestic product ratio and how the ratio has behaved recently. The results give us important insights into how governments in Central and Eastern Europe have reacted to the accumulation of debt. We distinguish between two groups of countries: one group where the sovereign debt stock stabilized after the crisis, and another where debt has been accumulated more quickly in recent years. The results provide important policy lessons for the authorities responsible.

Suggested Citation

  • Juan Carlos Cuestas, 2020. "Changes in sovereign debt dynamics in Central and Eastern Europe," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 25(1), pages 63-71, January.
    • Handle: RePEc:wly:ijfiec:v:25:y:2020:i:1:p:63-71
    DOI: 10.1002/ijfe.1728
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    References listed on IDEAS

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    1. Gabriella Legrenzi & Costas Milas, 2011. "Debt Sustainability and Financial Crises: Evidence from the GIIPS," Working Paper series 42_11, Rimini Centre for Economic Analysis.
    2. Juan Carlos Cuestas & Karsten Staehr, 2013. "Fiscal shocks and budget balance persistence in the EU countries from Central and Eastern Europe," Applied Economics, Taylor & Francis Journals, vol. 45(22), pages 3211-3219, August.
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    11. Cuestas, Juan Carlos & Gil-Alana, Luis A. & Staehr, Karsten, 2014. "Government debt dynamics and the global financial crisis: Has anything changed in the EA12?," Economics Letters, Elsevier, vol. 124(1), pages 64-66.
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    13. Juan Carlos Cuestas, 2013. "The Current Account Sustainability of European Transition Economies," Journal of Common Market Studies, Wiley Blackwell, vol. 51(2), pages 232-245, March.
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    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F15 - International Economics - - Trade - - - Economic Integration

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