IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

How to assess debt sustainability? Some theory and empirical evidence for selected euro area countries

  • Bettina Fincke
  • Alfred Greiner
Registered author(s):

    In this article we elaborate on the test proposed by Bohn (1998) that suggests to study whether the primary surplus relative to Gross Domestic Product (GDP) is a positive function of the public debt to GDP ratio in order to detect whether debt policies are sustainable. We argue that this should be complemented by additional tests for countries with rising debt to GDP ratios. We, then, apply that test to some countries of the euro area. In addition, we perform stationarity tests with respect to the real deficit inclusive of interest payments in order to gain additional insight. We conclude that there is empirical evidence that the chosen paths of fiscal policies are sustainable for the countries we consider, although there are country specific differences in debt policies.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://hdl.handle.net/10.1080/00036846.2011.581213
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 44 (2012)
    Issue (Month): 28 (October)
    Pages: 3717-3724

    as
    in new window

    Handle: RePEc:taf:applec:44:y:2012:i:28:p:3717-3724
    Contact details of provider: Web page: http://www.tandfonline.com/RAEC20

    Order Information: Web: http://www.tandfonline.com/pricing/journal/RAEC20

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:taf:applec:44:y:2012:i:28:p:3717-3724. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.