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A simulation model of public debt sustainability


  • Albu, Lucian-Liviu


There is a long period since the problem of public debt sustainability captures the attention of economists. However, there is no unanimity concerning an adequate unique sustainability indicator or function generally accepted. Just in this line of elaborating new models and improving methodologies in order to quantify the impact of various factors on public debt sustainability is our paper. Moreover, last years, during its pre- and post-accession into EU period, Romanian economy is facing to numerous problems. Among these, the public debt sustainability plays a central role, its implications practically expanding on all fields connected to the economic dynamics.

Suggested Citation

  • Albu, Lucian-Liviu, 2008. "A simulation model of public debt sustainability," MPRA Paper 11713, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:11713

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    References listed on IDEAS

    1. Elmendorf, Douglas W. & Gregory Mankiw, N., 1999. "Government debt," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 25, pages 1615-1669 Elsevier.
    2. Barro, Robert J, 1989. "The Ricardian Approach to Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 37-54, Spring.
    3. Hussein, Khaled A. & de Mello, Luiz Jr., 2001. "Is foreign debt portfolio management efficient in emerging economies?," Journal of Development Economics, Elsevier, vol. 66(1), pages 317-335, October.
    4. Fry, Maxwell J., 1992. "Some stabilizing and destabilizing effects of foreign debt accumulation in developing countries," Economics Letters, Elsevier, vol. 39(3), pages 315-321, July.
    5. Khaled Hussein, 2001. "Is Foreign Debt Portfolio Management Efficient in Emerging Economies?," IMF Working Papers 01/121, International Monetary Fund.
    6. Albu, Lucian Liviu, 2002. "Sustainability Function," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-14, June.
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    Cited by:

    1. Zaman, Gheorghe & Georgescu, George, 2014. "Romania’s external debt threats," Working Papers of Institute for Economic Forecasting 141215, Institute for Economic Forecasting.
    2. Zaman, Gheorghe & Georgescu, George, 2011. "Sovereign risk and debt sustainability: warning levels for Romania," MPRA Paper 32924, University Library of Munich, Germany.

    More about this item


    public debt; sustainability function; contour plot; primary deficit; interest rate;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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