6/2018 Juan Carlos Cuestas. Changes in sovereign debt dynamics in Central and Eastern Europe

Working Papers of Eesti Pank 6/2018

The aim of this paper is to shed some light on the degree of sustainability of fiscal debt for a group of Central and Eastern European countries. We apply a battery of time series econometrics methods to show how the financial crisis has affected the debt-to-GDP ratio and how the ratio has behaved recently. The results give us important insights into how governments in Central and Eastern Europe have reacted to the accumulation of debt. We distinguish between two groups of countries; one group where the sovereign debt stock stabilised after the crisis, and another where debt has been accumulated more quickly in recent years. The results provide important policy lessons for the authorities responsible. 

JEL Codes: C22, F15

Keywords: debt, Central and Eastern Europe, structural breaks, European integration


The views expressed are those of the author and do not necessarily represent the official views of Eesti Pank, the European Central Bank or the Eurosystem.