Analysis of contemporary Romanian public debt

Abstract

Modern research on sustainability of debt policies that apply statistical tests has started with the contribution by Hamilton and Falvin (1986) who analyzed whether the series of public debt in the USA contains a bubble term. Since then a great many papers have been written that try to answer the question of whether given debt policies can be considered as sustainable. The interest in that question is in part due to the fact that the latter question is not only of academic interest, but that it has practical relevance, too. Hence, if tests reach the conclusion that given debt policies cannot be considered as sustainable, governments should undertake corrective actions.