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Volatility Of International Financial Markets And Public Debt Sustainability

Author

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  • George GEORGESCU

    (Institute of National Economy)

Abstract

Under the circumstances of markets volatility persistence, the global financial balances deteriorated during the post-crisis period. In the case of advanced countries, the bailout of the private banking system by public or multilateral financial intervention, instead of leading to financial rebalancing has transferred a systemic risk to the sovereign level. Bringing high public debts back to sustainable levels by budgetary constraints of austerity programs has proved to hamper the economic growth that increased, in fact, the risk of sovereign default. Romania witnessed an excessive rise in the public indebtedness during 2007-2013 to unsustainable levels, which needs to be addressed by improving the public debt management and achieving surpluses in the primary balance.

Suggested Citation

  • George GEORGESCU, 2013. "Volatility Of International Financial Markets And Public Debt Sustainability," Romanian Journal of Economics, Institute of National Economy, vol. 37(2(46)), pages 135-152, December.
  • Handle: RePEc:ine:journl:v:2:y:2013:i:44:p:135-152
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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & M. Belen Sbrancia1, 2015. "The liquidation of government debt," Economic Policy, CEPR;CES;MSH, vol. 30(82), pages 291-333.
    2. Mehl, Arnaud, 2013. "Large global volatility shocks, equity markets and globalisation: 1885-2011," Working Paper Series 1548, European Central Bank.
    3. Zaman, Gheorghe & Georgescu, George, 2011. "Sovereign risk and debt sustainability: warning levels for Romania," MPRA Paper 32924, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    global financial balance; financial crisis; markets volatility; sovereign risk; public debt sustainability; primary balance;

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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