We examine the sustainability of public finances and its determinants for 19 Eurozone countries from 1995 to 2020. We conclude for the existence of panel cointegration between government revenues and expenditures; primary government balance and one-period lagged public debt-to-GDP ratio; and...

We assess public finances solvency for Euro Area countries using quarterly data between 1999Q1 and 2020Q4. Through a country-by-country analysis, the answer to the title question is true. For most countries, (i) the primary budget balance reacts positively to the lagged public debt ratio and...

The aim of the article is to investigate the fiscal determinants of stock-flow adjustment (SFA). Previous literature suggests that SFA may be used strategically to reduce budget deficit and public debt. As such, SFA impairs fiscal transparency and may endanger fiscal sustainability. Therefore,...

In this paper, we describe key problems of the current EU's fiscal framework and offer constructive options for its reform. A comprehensive reassessment of the rules is necessary, as the development of the rules has reached an impasse for both political and technical reasons. In our view, Europe...

How do prolonged low-interest-rate episodes affect fiscal discipline? This paper investigates this question by using a quantitative model with endogenous public debt management and sovereign default. Following a persistent interest rate reduction, sovereign risk and government bond yields...

This paper examines the role of financial frictions in the public debt-growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector autoregression model is estimated which allows the...

Governments can issue public debt for both good and bad reasons. The former include intertemporal tax smoothing, fiscal stimulus, and asset management. In contrast, the bad reasons, which generate higher indebtedness, are mainly associated with political cycles, rent capture, intergenerational...

Employing data from a representative survey conducted in Germany, this paper examines public preferences for the size and composition of government expenditure. We focus on public attitudes toward taxes, public debt incurrence, and public spending in six different policy areas. Our findings...

The aim of this paper is to investigate the vulnerability of fiscal policy in the case of 10 Central and Eastern European countries. We use a newly introduce indicator named Cumulative Excess of the Primary Balance (CEPB) which shows the deviations of current fiscal policy from a fiscal rule...

The recent economic and financial crisis emphasized the vulnerabilities at international level and among them is the public debt. The aim of this paper is to analyse the debt Laffer curve for Romania's case to see if country suffer from debt overhang. Data on public debt for the period 2013 -...