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Current Account Balance, Private Debt And Euro Area Sovereign Debt Crisis: A Comparison Of North And South

Author

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  • Isadora LAZAR

    (Bucharest Academy of Economic Studies and Researcher at the National Scientific Research Institute for Labour and Social Protection)

  • Madalina Ecaterina ANDREICA

    (The Bucharest Academy of Economic Studies and Researcher at the National Scientific Research Institute for Labour and Social Protection)

Abstract

The objective of this paper is to determine the difference, if any, between North and South in the Euro Area, by testing the influence of current account and private sector debt on the general government debt. We used panel data analysis for the period 2000 - 2011 and the results showed that current account and private sector debt influenced the dynamics of public debt both in Northern and Southern countries, but the dependence proved to be higher in the latter. Monte Carlo simulations were subsequently used in order to predict the variation in public debt for both Northern and Southern country groups.

Suggested Citation

  • Isadora LAZAR & Madalina Ecaterina ANDREICA, 2013. "Current Account Balance, Private Debt And Euro Area Sovereign Debt Crisis: A Comparison Of North And South," Romanian Journal of Economics, Institute of National Economy, vol. 37(2(46)), pages 40-52, December.
    • Handle: RePEc:ine:journl:v:2:y:2013:i:44:p:40-52
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    Cited by:

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    More about this item

    Keywords

    general government debt; current account; private debt; Euro Area; Monte Carlo simulation.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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