Sustainability of public debt: An example of selected European Union countries

Year 2022, Volume: 36 Issue: 2, 195 - 202, 22.04.2022

Murat Beşer

Abstract

The 2008 Mortgage crisis that emerges in the United States affected almost all countries in the world. Following this effect, a new crisis, namely the debt crisis, appeared in Europe. Greece, Spain, Italy, Ireland and Portugal have been the country’s most strongly affected by this crisis. As a consequence of the 2008 global financial crisis, the sustainability of increasing public debt has been a matter of debate. Within this context, in the study, the sustainability of public debt for the European Union countries with the highest public debt was examined with the help of different unit root tests using the annual data of 1995-2018. Based on the results of the study, public debt in the investigated countries was found to be sustainable.

Keywords

Panel Data Analysis, Public Debt, Sustainability, EU Countries

Kamu borcunun sürdürülebilirliği: Seçilmiş Avrupa Birliği ülkeleri örneği

Abstract

The 2008 Mortgage crisis that emerges in the United States affected almost all countries in the world. Following this effect, a new crisis, namely the debt crisis, appeared in Europe. Greece, Spain, Italy, Ireland and Portugal have been the country’s most strongly affected by this crisis. As a consequence of the 2008 global financial crisis, the sustainability of increasing public debt has been a matter of debate. Within this context, in the study, the sustainability of public debt for the European Union countries with the highest public debt was examined with the help of different unit root tests using the annual data of 1995-2018. Based on the results of the study, public debt in the investigated countries was found to be sustainable.

Keywords

Panel Data Analysis, Public Debt, Sustainability, EU Countries

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