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Abstract

In this paper, we investigate the issues regarding the stabilization of public debt and its decrease down to 60 per cent of GDP for selected European Union countries using the primary balance derived from the public debt dynamic model as a leading indicator. We find that there is a high probability of stabilizing public debt at its 2014 level conditional on achieving an increased GDP growth rate . In addition, results indicate that it would take at least 10 years for many of the analyzed countries to decrease their public debt ratio to 60 per cent of GDP. We also draw conclusions on what really matters for fiscal sustainability and on implications for national and European fiscal policies.



Item Type: MPRA Paper -

Original Title: High public debt in the euro area: still a fact-

English Title: High public debt in the euro area: still a fact-

Language: English-

Keywords: Fiscal policy, primary balance, public debt, fiscal sustainability, European Union-

Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal PolicyE - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy ; Stabilization ; Treasury PolicyH - Public Economics > H6 - National Budget, Deficit, and Debt > H62 - Deficit ; Surplus-





Author: Stoian, Andreea

Source: https://mpra.ub.uni-muenchen.de/63679/







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