We estimate various panel fiscal reaction functions, including those of main categories of general government revenue and expenditure for 12 Euro area member states over the 1970-2013 period. We find that in the peripheral countries where sovereign bond yields decreased sharply in the years...

To assess to which extent public debt positions in four CESEE economies (the Czech Republic, Hungary, Poland and Slovakia) are sustainable in the medium term, we apply a stochastic debt sustainability analysis (SDSA), building on Celasun, Debrun and Ostry (2007). In contrast to conventional debt...

Hungarian debt level has steadily increased since 2001, with the debt-to-GDP ratio reaching about 84% at end-2011. This high level combined with significant volatility of macroeconomic variable influencing potential future debt paths – GDP growth, exchange rate and interest spreads – put...

Many researchers have been focused for decades on the issue of public debt considering its effect on fiscal sustainability in the long run. There is a recent body of research showing that the current financial crises will lead to a considerable increase of public debt in a number of advanced...

This paper reviews recent trends in fiscal performance in Brazil, estimates fiscal reaction functions for the consolidated public sector and different levels of government, and tests for the sustainability of the public debt dynamics. The empirical analysis, based on monthly data for the period...

This study aims in analysing the fiscal sustainability for the case of European countries most affected by the economic downturn and sovereign debt: Portugal, Ireland, Italy, Greece and Spain. For that purpose, we apply fiscal reaction function which indicates the speed and the size of...

After the global financial crisis, some governments in the EU experienced serious debt financing problems, while others were less affected. This paper seeks to shed light on the divergent fiscal performance by assessing the fiscal conduct in the EU countries before and after the outbreak of the...

The aim of this paper is to analyze how the primary government balance in Central and Eastern European countries reacts in the short term, in order to assess fiscal sustainability in the long run. For the purpose of this study, a fiscal reaction function is used. Given the different orders of...

After the global financial crisis, some governments in the EU experienced serious debt financing problems, while others were less affected. This paper seeks to shed light on the divergent fiscal performance by assessing the fiscal conduct in the EU countries before and after the outbreak of the...

Public debt is considered sustainable if discounted net repayments are expected to cover the initial debt issuance, i.e. if the government intertemporal budget constraint is expected to hold. With risk averse lenders and an uncertain economic environment, Bohn (1995) stresses that this...