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The sustainability of European external debt: what have we learned?

The sustainability of European external debt: what have we learned?
The sustainability of European external debt: what have we learned?

In this paper we aim to analyze the level of sustainability of external debt and, more importantly, how it has changed for a number of European economies. Given the severity of the crisis since 2008, we argue that the path of external debt burdens may have changed since the start of the crisis, given the concerns about debt accumulation in most countries. We analyze the reaction of present debt accumulation to past debt stock, incorporating the possibility of endogenously determined structural breaks in this reaction function. We find that structural breaks happen in most cases after 2008, highlighting the importance of the policy measures taken by most governments.

0965-7576
445-468
Cuestas, Juan Carlos
e21c853f-d345-45d1-9a3c-40ef510a1e5f
Gil-Alana, Luis A.
94e83136-bb1f-44b8-a27d-4f2f6ee4b4ad
Regis, Paulo José
d696452e-72ef-48bc-9409-80996e297ca7
Cuestas, Juan Carlos
e21c853f-d345-45d1-9a3c-40ef510a1e5f
Gil-Alana, Luis A.
94e83136-bb1f-44b8-a27d-4f2f6ee4b4ad
Regis, Paulo José
d696452e-72ef-48bc-9409-80996e297ca7

Cuestas, Juan Carlos, Gil-Alana, Luis A. and Regis, Paulo José (2015) The sustainability of European external debt: what have we learned? Review of International Economics, 23 (3), 445-468. (doi:10.1111/roie.12175).

Record type: Article

Abstract

In this paper we aim to analyze the level of sustainability of external debt and, more importantly, how it has changed for a number of European economies. Given the severity of the crisis since 2008, we argue that the path of external debt burdens may have changed since the start of the crisis, given the concerns about debt accumulation in most countries. We analyze the reaction of present debt accumulation to past debt stock, incorporating the possibility of endogenously determined structural breaks in this reaction function. We find that structural breaks happen in most cases after 2008, highlighting the importance of the policy measures taken by most governments.

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e-pub ahead of print date: 27 March 2015
Published date: 1 August 2015

Identifiers

Local EPrints ID: 434327
URI: http://eprints.soton.ac.uk/id/eprint/434327
ISSN: 0965-7576
PURE UUID: 11633253-1f7f-4847-944b-a7c6bb411767
ORCID for Paulo José Regis: ORCID iD orcid.org/0000-0002-3256-464X

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Date deposited: 19 Sep 2019 16:30
Last modified: 28 Apr 2022 02:27

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Contributors

Author: Juan Carlos Cuestas
Author: Luis A. Gil-Alana

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